IFRS 16 Leases

The objective of IFRS 16 is to report information that (a) faithfully represents lease transactions and (b) provides a basis for users of financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. To meet that objective, a lessee should recognize assets and liabilities arising from a lease. (IFRS 16.1)

A lessee may elect not to apply IFRS 16 recognition requirements and to account for lease payments as an expense on a straight-line basis over the lease term or another systematic basis for the following types of leases: (IFRS 16.5, see also IFRS 16.Appendix B3-B8)

  • short-term leases or leases with a lease term of 12 months or less and containing no purchase options – this election is made by class of underlying asset; and
  • leases where the underlying asset has a low value when new.
The overview, available translations and latest news, as published by the IASB, regarding this standard can be found here.