IFRS 16 Leases Booklet

IFRS 16 sets out the principles for the recognition, measurement, presentation and disclosure of leases. The objective is to ensure that lessees and lessors provide relevant information in a manner that faithfully represents those transactions. that faithfully represents those transactions. This information gives a basis for users of financial statements to assess the effect that leases have on the financial position, financial performance and cash flows of an entity.

Introduction
Leases capitalisation on the balance sheet
Recognition of a Lease
Identifying a lease

When is an asset identified? – Some explanations
Identified asset
Right to control   /  IFRS 16 – Right to use  / Right to direct the use
Control the use – Right to obtain economic benefits from use
Decision-making rights – How and for what purpose is the asset used?
Does a contract include a lease? – A decision tree
Separation of components of a contract
Combine separate lease contract
Portions of assets

Lessee-Measurement
Impairment test before and after IFRS 16 Leases
Treatment of lease liabilities in impairment of a Cash Generating Unit (CGU)
Impairment of right-to-use assets
Lease liability
Sale and leaseback accounting
Lease cases:

Calculation examples:
Case 1
Case 2

IFRS 16 Leases Right to use asset Lease liability

IFRS 16 Leases Right to use asset Lease liability

IFRS 16 sets out the principles for the recognition, measurement, presentation and disclosure of leases. The objective is to ensure that lessees and lessors provide relevant information in a manner that faithfully represents those transactions. This information gives a basis for users of financial statements to assess the effect that leases have on the financial position, financial performance and cash flows of an entity.