Leash Blog
Insights & Expertise
Expert insights, guides, and best practices for IFRS 16 lease accounting and compliance.
Featured Article
Manufacturer or Dealer Lessors Explained - IFRS 16
A manufacturer or dealer lessor is an entity that sells assets in the normal course of business and also offers those assets under lease arrangements. Unlike banks or other financial lessors who primarily earn interest income, manufacturer or dealer lessors generate profit from both the sale of the asset and the financing element of the lease.
Recent Articles
Sale and Leaseback Guide - IFRS 16
This article explains the accounting treatment for sale and leaseback transactions under IFRS 16, including journal entries, profit recognition, and adjustments for off-market terms.
IFRS 16 Non-Lease Components Guide: Definition, Examples, and Practical Expedient
This article explores the distinction between lease and non-lease components under IFRS 16, including examples, accounting treatment, and the optional practical expedient available to lessees.
Subleases Explained - Accounting Under IFRS 16
A sublease occurs when a lessee (the intermediate lessor) grants a lease of the right-of-use (ROU) asset obtained under an original lease to another party (the sublessee). Importantly, the intermediate lessor continues to account for the original lease with the head lessor and also accounts for the sublease with the sublessee.
Leasehold Improvements Guide - IFRS
Under IFRS, leasehold improvements are treated as property, plant, and equipment (PPE) and fall under the scope of IAS 16. This article explains how a lessee should account for leasehold improvements including recognition, measurement, and depreciation.
Variable Lease Payments Guide - IFRS 16: Definition, Examples, and Accounting Treatment
Variable lease payments are a key area of complexity under IFRS 16. This article explores their types, examples, and the appropriate accounting treatment for both lessees and lessors.
Consolidation of Intercompany Leases Guide - IFRS 16 (Including Journal Entries)
An intercompany lease is a lease between entities within the same group. These transaction should be eliminated in the financial records of the group, as an accounting entity (the group) cannot have transactions with itself. This concept has critical implications during consolidation.
Lease Modifications Guide - IFRS 16 Leases
This article explains how lease modifications impact lessees and lessors under IFRS 16, including remeasurements, discount rates, journal entries and ohter accounting treatments.
Tax Treatment of Leases Under IFRS 16 - South Africa
This article explains the different tax consequences for leases, highlighting the distinctions between ICAs and normal rental agreements under South African VAT and income tax law.
Lease Incentives Guide - IFRS 16 - Examples & Journal Entries
Lease incentives, often provided by lessors to lessees, impact both the accounting treatment of leases and financial statements under IFRS 16. This article explores the definition, treatment, and implications of lease incentives for both lessees and lessors.
Finance Leases vs. Operating Leases - IFRS 16 Lessor Accounting
A finance lease transfers substantially all risks and rewards of ownership to the lessee. The lessor in a finance lease derecognises the asset and recognises a receivable. All other leases are operating leases, where the asset is retained on the lessor's balance sheet and lease income is recognised on a straight-line basis.
Interest Rate Implicit In The Lease Explained - IFRS 16 & ASC 842
The interest rate implicit in the lease is the rate that reflects the lessor’s return on a lease. One can think of it as the lessor's internal rate of return on the lease. This rate is used to discount lease payments to a present value, in order to recognise a lease liability