Lease Liability

If your business has outgrown its current space — or you’re opening your first physical location — you’ll eventually hit the same fork in the road every commercial tenant or owner faces: should you buy the building or lease it? There’s no universal right answer. A ten-location restaurant chain, a solo law practice, and a […]

Think about a major airline that flies 100 airplanes. If you looked at their official financial records a few years ago, you might have seen zero debt for those planes. How is that possible? For a long time, companies used a legal loophole to hide billions of dollars in rent and lease commitments. They kept

IFRS 16 changed how leases are measured and recognized. Now a new standard, IFRS 18, is changing how financial performance gets presented overall, and that has real implications for how lease related figures show up in your financial statements. If your business reports under IFRS, this is a change worth understanding well before it becomes

Sale-and-leaseback deals have long been a popular way for businesses to free up cash tied up in property or equipment while still keeping the use of that asset. But for years, one part of the accounting for these transactions had a gap that created real inconsistency across companies. Standard setters addressed this gap with a

Not every contract that includes a lease is purely a lease. Many agreements bundle the right to use an asset together with other services, such as maintenance, insurance, or utilities. Under IFRS 16, businesses are required to separate, or “unbundle,” these components, and getting this wrong can significantly distort your lease liability and right of

Lease agreements are rarely as simple as a fixed monthly payment. Many contracts include variable elements, whether tied to an index, a market rate, sales performance, or actual usage of the leased asset. Under IFRS 16, how these variable payments are treated depends entirely on what they are linked to, and getting this classification wrong

One of the trickier parts of IFRS 16 is that the lease term is not always a fixed, simple number. Many leases include renewal options, termination options, or both, and businesses need to make a judgment call about whether these options will actually be exercised. That judgment does not stay static either. It can change

Audit season has a way of putting every assumption and calculation under a microscope, and lease accounting under IFRS 16 is no exception. Since the standard requires detailed present value calculations, ongoing reassessments, and specific disclosures, auditors tend to focus closely on this area. Knowing what auditors typically look for can help your finance team

If you have worked with IFRS 16 for any length of time, you already know that the discount rate is one of the most important numbers in the entire lease calculation. Get it wrong, and your lease liability, right of use asset, interest expense, and depreciation will all be off. Yet many accountants still find

Managing lease accounting used to be a job that lived inside bulky spreadsheets, long formulas, and a great deal of manual effort. Finance teams would spend hours, sometimes days, pulling together lease data, calculating present values, and making sure everything matched up correctly. Then IFRS 16 arrived and changed the entire landscape. IFRS 16, which