CHAPTER 10- LEASE ACCOUNTING (BASIC PRINCIPLES)

IFRS 16 is the new lease standard. Under

Appendix A of IFRS 16, a lease is defined as a
contract or part of a contract that conveys
IAS 17 right of use of underlying asset for a period of
time in exchange for consideration. Appendix
B9 provides that to be a lease, a contract must
LEASE covey the right to control the use of the
identified asset. Appendix B13 states that an
STANDARD
asset is typically identified by being explicitly
specified in a contract or implicitly specified
when made available to the customer. For
example, a physically distinct portion an asset
such as floor of a building could be considered
IAS 17 an identified asset.

IFRS 16
LEASE
STANDARD

STANDS
CHAPTER 11- LEASE ACCOUNTING (OTHER ISSUES)

IFRS 16, paragraph 46, states that a gain or

loss should be recognized as a result of the
partial termination of the lease. If the
LEASE decrease in carrying amount of lease liability is
MODIFICATION higher than the decrease in carrying amount of
right of use of asset, the difference is a
termination gain. On the other hand, if the
decrease in carrying amount of right of use of
DECREASE IN asset is higher than the decrease in carrying
SCOPE OF LEASE amount of lease liability, the difference is a
termination loss.

TERMINATION

GAIN