IFRS 16 Leases Knowledge Center
Explore our verified library of IFRS 16 Leases transactions. Every entry is reviewed for IFRS compliance and real-world accuracy by our technical accounting team.
How to record initial lease recognition
Initial recognition of a Right-of-Use asset and lease liability under IFRS 16 at the commencement date.
How to record monthly lease payment
Accounting for a periodic lease payment involving interest expense and principal reduction.
How to record ROU asset depreciation
Recognition of depreciation expense for the Right-of-Use asset over the lease term.
How to account for short-term leases
Application of the practical expedient for leases with a term of 12 months or less.
How to record variable lease payments
Recording lease payments that depend on performance or usage not included in the liability.
How to record lease modification increase
Adjusting the Right-of-Use asset and lease liability when the scope of a lease is increased during the term.
How to record lease modification decrease
Recording a partial termination or reduction in lease scope which results in a gain or loss in the P&L.
How to account for lease incentives
Recording cash incentives received from the lessor at or before the commencement date.
How to record initial_direct_costs
Capitalizing incremental costs such as legal fees or commissions incurred to obtain a lease.
How to record lease termination
Removing the ROU asset and lease liability from the books upon early termination of the contract.
How to record low-value asset lease
Recognition of lease payments for assets of low value as an expense on a straight-line basis, bypassing the ROU asset model.
How to record lease restoration provision
Recording the initial estimate of costs to be incurred by the lessee in dismantling or restoring the underlying asset.
How to record lease interest accrual
Recognition of the periodic interest expense on the lease liability using the effective interest method.
How to record sub-lease classification
Derecognition of the head-lease ROU asset when an entity enters into a finance sub-lease as an intermediate lessor.
How to record COVID-19 rent concession
Accounting for rent concessions directly in the income statement under the IFRS 16 practical expedient.
How to record sale and leaseback transaction
Records the sale of an asset and the subsequent leaseback as a seller-lessee, recognizing the gain only on the rights transferred.
How to record lease prepayments
Records lease payments made to the lessor before or at the commencement date, which are capitalized into the ROU asset.
How to record ROU asset impairment
Records the write-down of a Right-of-Use asset when its carrying amount exceeds its recoverable amount under IAS 36.
How to record lease liability FX adjustment
Records the remeasurement of a lease liability denominated in a foreign currency at the reporting date exchange rate.
How to record lease CPI remeasurement
Records the adjustment to the lease liability and ROU asset when future lease payments change due to a change in an index like CPI.
How to record lease extension exercise
Recording the remeasurement of lease liability when an extension option becomes reasonably certain.
How to record residual value guarantee change
Adjusting the lease liability for changes in estimated payments under a residual value guarantee.
How to record lessor finance lease start
Initial recognition of a finance lease by a lessor.
How to record lessor operating lease receipt
Recording lease income for an operating lease on a straight-line basis.
How to record ROU asset revaluation
Applying the revaluation model to a Right-of-Use asset.
How to record lease purchase option exercise
Recording the settlement of the lease liability and the reclassification of the ROU asset to PPE upon exercising a purchase option.
How to record lessor finance lease interest
Recognition of finance income by a lessor based on the net investment in a finance lease.
How to record lessor finance lease direct costs
Capitalizing incremental costs incurred by a lessor to negotiate and arrange a finance lease.
How to record lease service component payment
Accounting for a combined payment that includes both lease principal and non-lease service components.
How to record lessor lease impairment
Recognition of expected credit losses (ECL) on lease receivables by a lessor.
How to record lease liability reclassification
Reclassifying the portion of the lease liability due within the next twelve months from non-current to current liabilities.
How to record lessor finance lease principal
Recording the receipt of the principal portion of a lease payment from the lessee in a finance lease arrangement.
How to record lessor operating lease depreciation
Recording periodic depreciation expense for an asset that is being leased out under an operating lease.
How to record lease security deposit
Recording the payment of a refundable security deposit to a lessor at the inception of a lease.
How to record lessor finance lease termination
Accounting for the early termination of a finance lease from the lessor's perspective, including asset repossession.
How to record lessor operating lease direct costs
Initial direct costs incurred by lessors in negotiating and arranging an operating lease are capitalized and recognized as an expense over the lease term on the same basis as the lease income.
How to record ROU asset impairment reversal
Accounting for the reversal of a previously recognized impairment loss on a Right-of-Use (ROU) asset when there is a significant change in the estimates used to determine the asset's recoverable amount.
How to record lease reassessment of term
Accounting for a change in the lease liability resulting from a change in the assessment of whether a lessee is reasonably certain to exercise an extension or termination option.
How to record sublease finance recognition
When an intermediate lessor enters into a sublease classified as a finance lease, it derecognizes the ROU asset relating to the head lease and recognizes a net investment in the sublease.
How to record lessor finance lease modification
Adjusting a finance lease from the lessor's perspective when a modification is not accounted for as a separate lease and the lease would have still been classified as a finance lease.
How to record lessor manufacturer profit
Recognition of selling profit or loss by a manufacturer or dealer lessor at the commencement of a finance lease.
How to record ROU asset transfer to PPE
Reclassification of a Right-of-Use (ROU) asset to Property, Plant and Equipment (PPE) when a purchase option is exercised.
How to record lessor operating lease incentive
Amortization of a lease incentive paid to a lessee under an operating lease arrangement.
How to record sublease operating rental income
Recognition of monthly rental income by an intermediate lessor when the sublease is classified as an operating lease.
How to record lessor variable lease receipts
Recognition of lease income from variable payments that were not included in the net investment in the lease.
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