Transcription of Short-term leases - Deloitte
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Short-term leases - Deloitte
I Short-term leases i Foreword IFRS 16 leases became effective for accounting periods beginning on or after 1 January 2019. The standard includes an important practical expedient for leases with a lease term of twelve months or less: Short-term leases . This expedient enables entities to simply expense lease payments over the lease term and avoid the more complex accounting of recognising a right-of-use asset and a corresponding liability on the balance sheet. On initial application, many entities have taken advantage of this practical expedient; however, it is important both from an accounting system s perspective and for those involved in negotiating and approving leases to understand the potential accounting consequences of subsequent amendments or renewals of these leases .
detailed understanding of the lease modification requirements of IFRS 16, especially when working through examples 1 to 4 of this publication. Appendix I to this document reproduces the relevant IFRS 16 definitions and guidance on short-term leases together with explanations on some of those concepts.
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