IFRS 16Chapter 4Lesson 1
The unit of account: portfolio, combination, components
Step 1 of 7Learning objectives
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Once the lease has been identified, the unit of account must be set: a single contract, a portfolio of similar contracts, several contracts combined into one, or a contract split into lease and non-lease components. The lesson shows how the lessee allocates the consideration on the basis of stand-alone prices, when it may choose not to separate services, and why the lessor cannot.
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Learning objectives
- Determine when contracts entered into with the same counterparty must be combined, and when the portfolio approach is permitted.
- Identify the lease and non-lease components of a contract.
- Allocate the consideration between components on the basis of relative stand-alone prices, for the lessee.
- Assess the effect of the practical expedient not to separate and distinguish the lessor's treatment.