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February 15, 2021
IFRS 16: Scope and Exemptions
As announced in our January newsletter – Has the plane landed? we are addressing issues surrounding IFRS 16 Leasing in a short newsletter series. In this newsletter, we focus on the scope of application of IFRS 16.
The scope of the standard is initially set out in concise form by way of a list of scope exceptions in IFRS 16.3 and 16.4 (please briefly read). The definition of a lease is provided in the list of defined terms in Appendix A to IFRS 16. This states that a lease is “a contract, or part of a contract, that conveys the right to use an asset (the underlying asset) for a period of time in exchange for consideration.” By this definition, there is expressly no need for language such as ‘lease’, ‘lease contract’ or similar. Accordingly, all ‘rentals’ likewise normally come under this standard, so in case of doubt, the standard (initially) has a very broad scope.