New leasing standard – IFRS 16 Leases



  • Almost all leases will be recognised in the statement as a ‘Right-of-use’ asset and a lease liability. Therefore we won’t see rent/lease expense on the P&L statement.
  • Asset – use cost/revaluation model (IAS 16 PPE) or treat it under (IAS 40) Investment Property
  • Liability will give rise to interest expense; Right-of-use asset will give rise to depreciation charge.


  • No changes; Lessors continue to account for leases as operating lease or finance lease – depending on whether the lease transfers substantially all risks and rewards associated with the underlying asset to the lessee.

Effective Date

  • Beginning on the 1 Jan 2019
  • Full retrospective application / retrospective application
  • At the date of initial application – cumulative impact as an adjustment to equity


  • Leases to explore for or use minerals, oil, natural gas and similar non-regenerative resources;
  • Leases of biological assets within the scope of IAS 41 Agriculture held by a lessee;
  • Service concession arrangements within the scope of IFRIC 12 Service Concession Arrangements;
  • Licences of intellectual property granted by a lessor within the scope of IFRS 15; and
  • Rights held by a lessee under licensing agreements within the scope of IAS 38 Intangible Assets for such items (motion picture films, video recordings, plays, manuscripts, patents and copyrights)
  • Low value asset (Lease that is less than 12 months and with no options) 
  • Short term leases