Post-Implementation Review of IFRS 16 Leases

In January 2016, the IASB issued IFRS 16. The Standard was effective for annual periods beginning on or after 1 January 2019. Earlier application was permitted, as long as IFRS 15 Revenue from Contracts with Customers is also applied. In December 2023, the IASB decided to commence the PIR of IFRS 16.

The RFI is focused on six key areas the IASB would like to understand:

1. Stakeholders’ views on and experiences relating to IFRS 16 to assess, overall, whether IFRS 16 is working as intended.
2. Whether the application of judgement affects the usefulness of information to users and whether, as a result, the improvements to the quality and comparability of financial information about leases are significantly lower than what the IASB expected when it issued IFRS 16.
3. Whether the intended improvements to the quality and comparability of information about lease-related cash flows that lessees present or disclose are largely as expected.
4. Whether the requirements for the measurement of the lease liability are contributing to ongoing costs that are significantly higher than expected and, if so, how stakeholders would propose the IASB reduce these costs without significantly affecting the usefulness of financial information about leases.
5. How it can improve future transition requirements.
6. How often stakeholders have observed issues related to applying IFRS 16 with:
   1. IFRS 9 to rent concessions;
   2. IFRS 15 when assessing whether the transfer of an asset in a sale and leaseback transaction is a sale; and
   3. IFRS 15 to gain or loss recognition in a sale and leaseback transaction.

The UKEB has undertaken desk-based research and conducted some limited outreach activities on this topic with the UKEB Investor Advisory Group (IAG), the UKEB Preparer Advisory Group (PAG), the UKEB Accounting Firms and Institutes Advisory Group (AFIAG), the UKEB Financial Instruments Working Group (FIWG) and the UKEB Academic Advisory Group (AAG).

The UKEB outreach plan includes public consultation on the UKEB’s Draft Comment Letter expected to be published in July 2025.