IFRS 16 Lease Liability & Right-of-Use Asset Calculator
Enter your lease terms to calculate the initial lease liability and right-of-use asset, with the full amortisation and depreciation schedules behind them.
How the liability is measured
IFRS 16 measures the lease liability at the present value of the unpaid lease payments, discounted at the rate implicit in the lease or, where that is not readily determinable, the lessee's incremental borrowing rate.
Why the asset differs from the liability
The right-of-use asset starts at the liability, then adds prepayments and initial direct costs and deducts lease incentives received. From there the liability accretes interest while the asset depreciates straight-line, so the two balances diverge over the lease term.
Managing more than one lease?
Leash keeps your whole portfolio in one place, with modifications, remeasurements, journals and disclosure notes handled automatically.
See how Leash worksFrequently asked questions
How is the lease liability calculated under IFRS 16?
The lease liability is measured at the present value of the lease payments that have not been paid at the commencement date, discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, the lessee uses its incremental borrowing rate.
How is the right-of-use asset measured at initial recognition?
The right-of-use asset is measured at cost, comprising the initial measurement of the lease liability, any lease payments made at or before the commencement date less any lease incentives received, any initial direct costs incurred by the lessee, and an estimate of restoration costs.
Why do the lease liability and the right-of-use asset differ?
They are equal only when there are no prepayments, initial direct costs, lease incentives or restoration obligations. Each of those items adjusts the right-of-use asset but not the lease liability, and the two balances then unwind differently because the liability accretes interest while the asset depreciates on a straight-line basis.
Is this IFRS 16 calculator free?
Yes. The calculator and both schedules are free to use, and you can download the complete workbook as an Excel file.