IFRSC Knowledge Base

Last updated: 22 December 2019 A lease modification is a change in the scope of a lease, or the consideration for a lease, that was not part of the original terms and conditions of the lease (IFRS 16.Appendix A). Examples of lease modifications are adding or terminating the right to use one or more underlying … Read more

Last updated: 28 February 2020 At the commencement date, a lessee (a customer) recognises a right-of-use (‘RoU’) asset and a lease liability (IFRS 16.22). RoU is an asset representing lessee’s right to use the leased asset during the lease term. Initial measurement of the right-of-use asset Components of the right-of-use asset The right-of-use (‘RoU’) asset … Read more

Last updated: 19 March 2020 Lease term comprises the following (IFRS 16.18): non-cancellable period of a lease, periods covered by an option to extend the lease – if the lessee (customer) is reasonably certain to exercise that option; and periods covered by an option to terminate the lease – if the lessee (customer) is reasonably certain … Read more

Last updated: 16 May 2020 Decision tree for identifying a lease At inception of a contract, an entity should assess whether the contract is, or contains, a lease. A contract is, or contains, a lease if the contract gives the right to control the use of an identified asset (‘underlying asset’) for a period of … Read more

Last updated: 29 July 2019 IFRS 16 sets out principles for the recognition, measurement, presentation and disclosure of leases. IFRS 16 applies to all leases, except for items listed in paragraph IFRS 16.3. Specific recognition exemptions are provided for short-term leases and leases of low value assets (IFRS 16.5-8). IFRS 16 sets out substantially different … Read more

Last updated: 7 November 2018 Disclosure requirements relating to contracts with customers are set out in paragraphs IFRS 15.110-128; B87-B89. As these disclosure requirements are quite extensive and some of them are not relevant for all entities, the IASB made it clear that the disclosure requirements should not be treated as a checklist, but instead … Read more

Last updated: 30 March 2020 IFRS 15 specifically deals with incremental costs of obtaining a contract and costs to fulfil a contract. Incremental costs of obtaining a contract Incremental costs of obtaining a contract are those costs that the entity would not have incurred if the contract had not been obtained (e.g. if any of … Read more

Last updated: 26 July 2019 Contract asset Contract asset is recognised when a performance obligation is satisfied (and revenue recognised), but the payment is conditional not only on the passage of time. The other conditions usually relate to entity’s fulfilment of other performance obligations in the contract. Contract assets are different from trade receivables, because trade … Read more