Summary
Summary Lease IFRS 16
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Summary of new lease standard which does away with operating leases
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Financial Instruments IFRS 9
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Foreign Exchange IAS 21
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Intangible Assets IAS 38
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LeasesDefinition of a Lease
Right to control use of identifiable asset
For a period of time
For a consideration
The requirements for a lease:
Right to control or obtain almost all economic benefits
Right to direct use
Identifiable asset
Explicitly or implicitly identifiable
Can be a portion of another asset if
Physically unique
Full capacity available
Not identifiable if substantive substitution rights
Right to substitute
a) Practical ability to replace current asset with a similar asset
b) Supplier will gain economically from said substitution
Substantive substitution rights
Right or obligation to substitute on / after inception (NA if not practically
possible)
Must be due to circumstances from the contract’s inception
A great cost usually will deter a substantive substitution right
Maintenance and repairs not Substantive sub rights
If it cannot be easily determined there are no substantive sub rights
Right to obtain economic benefits
Acquired directly or indirectly
Right to gain essentially all economic benefits from lease
Right to direct use
Direct how and for what the asset is used for
It is relevant to what extent certain things are predetermined
The operation instructions and conditions may be fixed
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