ACCA welcomes the opportunity to provide views in response to the IASB’s request for information for the post-implementation review of IFRS 16 Leases (the Standard). We hope that our comments, which include feedback from our Global Forum for Corporate Reporting, are a helpful contribution to this process.

IFRS 16 is generally working well for straightforward lease arrangements. However, there are some challenges in applying the requirements in the Standard to complex arrangements that usually require significant judgements in determining the lease term, the lease payments and the discount rate. Details are in our responses to specific questions.

We suggest the IASB consider simplifying the requirement for determining discount rate to reduce complexity and improve comparability. See our comments in Q2(a).

We also suggest the IASB review the presentation of lessee’s lease-related cashflows in the statement of cashflows following feedback from stakeholders that the current presentation approach does not faithfully represent leases that are operating in nature. See our comments in Q3.

While the initial implementation of the Standard has been challenging for some entities, practice has mainly settled and there is limited appetite for major changes to the requirements in the Standard. However, stakeholders will benefit from further clarity and guidance on applying the requirements in the Standard.

To read in detail, please download the consultation response document found on this page.