IFRS 16 – Leases of Low Value Assets

IFRS 16 provides an optional exemption from the full requirements of the standard for: Short-term leases (leases with a lease term of 12 months or less)Leases for which the underlying asset is low value (e.g. tablet and personal computers, small items of furniture etc.). In this article we shall focus on the second exemption. The standard does not provide very much … Continue reading IFRS 16 – Leases of Low Value Assets

IFRS 16 – Lease Modifications

Lease modifications arise from changes to the underlying contract agreed between the lessee and the lessor subsequent to commencement of the lease. Under IFRS 16, the accounting for the modification depends on whether the modified terms increase or decrease the scope of the lease, and whether increases in scope require consideration to be paid that … Continue reading IFRS 16 – Lease Modifications

IFRS 16 – Sale & Leaseback

In a sale-and-leaseback transaction (‘SALT’), an entity (seller-lessee) sells an asset to another entity (buyer-lessor) who then leases it back to the seller-lessee. The accounting for a SALT under IFRS 16 is significantly different to that required by IAS 17. In order to determine the appropriate accounting treatment under IFRS 16, the sale must first … Continue reading IFRS 16 – Sale & Leaseback