Course Overview

IFRS 16 Leases introduces a major change in lease accounting by requiring companies to recognise lease liabilities and right-of-use assets on the balance sheet. This replaces the earlier off-balance-sheet treatment, improving transparency, comparability, and consistency in financial reporting.

The course explores the core principles of IFRS 16, including lease identification, classification, exemptions, and accounting models for both lessees and lessors. Participants will also gain practical understanding of how lease costs are measured, allocated, and reported in financial statements.

The IFRS 16 Leases training programme is designed for finance professionals seeking to manage the complexities of lease accounting effectively. It provides practical tools to identify lease contracts, apply correct accounting treatments, and meet disclosure and presentation requirements, including sale-and-leaseback transactions (SLAT).

Through real-world case studies, exercises, and interactive discussions, participants develop hands-on expertise in applying IFRS 16. By the end of the course, they will be able to improve financial reporting accuracy, ensure compliance with accounting standards, and add strategic value within their organisation.

Agenda

Day — 1 Introduction to IFRS 16 and Lease Classification

• Understanding the objectives and scope of IFRS 16 Leases and its impact on financial reporting
• Discussing how IFRS 16 interacts with other accounting standards
• Defining key lease-related concepts and terminology under IFRS 16
• Exploring types of leases, including finance leases and operating leases
• Understanding recognition exemptions, including short-term leases and low-value asset exemptions
• Group Discussion: Analyse the impact of new lease accounting standards on lease classification and financial reporting treatment

Day — 2 Identifying a Lease and Determining the Lease Term

• Understanding how to assess whether a contract contains a lease under IFRS 16
• Identifying key indicators of a lease, including:
  • Presence of an identified asset
  • Right to obtain economic benefits from the asset
  • Right to direct the use of the asset
• Exploring the separation of lease components within contracts and principles for combining multiple contracts
• Understanding the process of determining the lease term under IFRS 16
• Examining the key periods considered in lease term assessment, including:
  • Non-cancellable period
  • Enforceable period
• Discussing common challenges and issues in applying lease term judgment in practice
• Activity: Identify and evaluate leases within different contractual scenarios

Day — 3 Lessee Accounting

• Understanding the lessee accounting model under IFRS 16
• Explaining initial recognition of leases, including:
  • Lease liability
  • Right-of-use (ROU) asset
• Exploring the components involved in the initial measurement of lease assets and liabilities
• Understanding the role and importance of discount rates in lease valuation at initial recognition
• Defining subsequent measurement of lease liabilities and right-of-use assets
• Identifying conditions that require lease remeasurement or modification
• Exercises: Calculate lease liabilities and right-of-use assets using Excel-based scenarios

Day — 4 Lessor Accounting

• Understanding the lessor accounting model under IFRS 16 and its application in financial reporting
• Identifying key differences between a lease arrangement and a sale/purchase transaction
• Understanding the separation of lease and non-lease components within contracts
• Exploring impairment requirements related to lease receivables and expected credit losses
• Discussing accounting challenges associated with operating leases from a lessor’s perspective
• Identifying criteria for accounting treatment of lease modifications under IFRS 16
• Reviewing real-world examples of lessor accounting, focusing on both finance leases and operating leases and their financial impact

Day — 5 Presentation, Disclosure and Sale-and-Leaseback Transactions (SLAT)

• Understanding the requirements for the presentation of lease balances and lease-related transactions in financial statements under IFRS 16
• Discussing detailed disclosure requirements for lessees and lessors, ensuring transparency and comparability in reporting
• Recognising the impact of deferred tax implications on both lessee and lessor accounting treatments
• Defining sale-and-leaseback transactions (SLAT) and understanding the key principles introduced under IFRS 16
• Understanding the accounting treatment of sale-and-leaseback arrangements for both lessees and lessors
• Activity: Analyse a company’s lease arrangements, including initial recognition, subsequent measurement, modifications, and required disclosures
• Lesson Learned and Course Evaluation

Learning Outcomes

By the end of this course, participants will confidently master IFRS 16 Leases, including the ability to:

• Understand IFRS 16 and recognise its impact on financial reporting for lease arrangements
• Classify leases under IFRS 16 and identify exemptions for short-term and low-value leases
• Improve the ability to assess whether a contract contains a lease under IFRS 16 requirements
• Apply the lease accounting model by recognising right-of-use assets and lease liabilities, and understanding when remeasurement is required due to changes in lease terms
• Use the lessor accounting model to correctly record and manage lease transactions under IFRS 16
• Understand presentation and disclosure requirements for both lessees and lessors
• Apply accounting principles for sale-and-leaseback transactions (SLAT) for both lessees and lessors

Who Should Attend

The Mastering IFRS 16 Leases course is designed for professionals involved in financial reporting, lease accounting, and asset management, including:

• Finance and accounting professionals
• Financial controllers
• Chief Financial Officers (CFOs)
• Internal and external auditors
• Tax and financial advisors
• Lease administrators
• Property managers
• Corporate lawyers and legal advisors
• Business owners and entrepreneurs
• Consultants and financial analysts