The IASB has published IFRS 16, completing its longrunning project to overhaul lease accounting.

IFRS 16 will require lessees to account for leases “on-balance sheet” by recognizing a “right-of-use” asset and a lease liability.

For many businesses, however, exemptions for short-term leases and leases of low value assets will greatly reduce the impact. IFRS 16 also:

• changes the definition of a lease;

• sets requirements on how to account for the asset and liability, including complexities such as non-lease elements, variable lease payments and option periods;

• changes the accounting for sale and leaseback arrangements;

• largely retains IAS 17 Leases’ approach to lessor accounting;

• introduces new disclosure requirements.