Lease calculation provides a logical model to understand the calculations that have to be made in accounting for IFRS 16 Leases. In addition a lease contract calculation Excel model is provided to do the work. IFRS 16 Structured best approach
The 5-step lease calculations model
Use the 5-step lease calculations model to systematically document your lease calculations.
Step 1. Identification of a lease contract
a) When should this assessment be made?
Inception Date of the Contract
Is the earlier of the date of:
b) When Does a Lease Exist?
A lease exists where the contract grants the right to control the use of an identified asset for a period of time in exchange for consideration.
- The right to obtain substantially all of the economic benefits from use of the identified asset; and
- The right to direct the use of the identified asset. IFRS 16 Structured best approach