Scope and exclusions

Learning objectives

• Identify the contracts excluded from the scope of IFRS 16 (exploration for or use of minerals, biological assets held by a lessee, service concession arrangements, licences of intellectual property granted by a lessor, certain rights held by a lessee under licensing agreements within the scope of IAS 38).L1, L2
• Determine whether a lessee may apply IFRS 16 to a lease of an intangible asset other than those excluded.L2

Normative references

• IFRS 16 §3The standard applies to all leases, including leases of right-of-use assets in a sublease, except: (a) leases to explore for or use minerals, oil, natural gas and similar non-regenerative resources; (b) leases of biological assets within the scope of IAS 41 held by a lessee; (c) service concession arrangements within the scope of IFRIC 12; (d) licences of intellectual property granted by a lessor within the scope of IFRS 15; (e) rights held by a lessee under licensing agreements within the scope of IAS 38 (motion picture films, video recordings, plays, manuscripts, patents, copyrights, etc.).
• IFRS 16 §4A lessee may, but is not required to, apply IFRS 16 to leases of intangible assets other than those described in paragraph 3(e).

Original summaries of the paragraphs (reference register), never a quotation of the standard.

12 questions

• IFRS 16 also applies to contracts under which a lessee subleases the right-of-use asset it holds.L1
• Leases to explore for or use minerals, oil, natural gas or similar non-regenerative resources are excluded from the scope of IFRS 16.L1
• A lessee is required to apply IFRS 16 to all leases of intangible assets other than those described in paragraph 3(e).L2
• Which of the following arrangements is excluded from the scope of IFRS 16?L1
• Brevalis, owner of a patented process, grants a customer a licence to use that process for five years. Which standard does Brevalis apply to this licence?L1
• The broadcaster Cinévia holds, under a licensing agreement within the scope of IAS 38, the right to broadcast a series of films for three years. How does this contract relate to IFRS 16?L2
• Which of the following contracts are excluded from the scope of IFRS 16? (several answers)L1
• Cobalis leases, as lessee, an intangible asset that does not fall within the categories of paragraph 3(e) (licensed rights within the scope of IAS 38 such as films, patents or copyrights). Which statements are correct? (several answers)L2
• Pressilux leases identified industrial presses to its customers for periods of three to five years. It also grants one of these customers a licence to use its patented surface-treatment process. How does Pressilux analyse these two arrangements with regard to the scope of IFRS 16?L2
• The dairy cooperative Verdal leases, for four years, a herd of dairy cows (biological assets within the scope of IAS 41) and, for ten years, the barn that houses it. It wonders which contracts fall within the scope of IFRS 16 as lessee.L2
• The studio Altamar leases an identified screening room for six years. It also holds, under a licensing agreement within the scope of IAS 38, exploitation rights to a feature film. Its finance director proposes applying IFRS 16 to both contracts, relying on the option available for intangible assets. Which analysis should be adopted?L2
• Norvelis reviews the contracts it has entered into. Which of them fall within the scope of IFRS 16? (several answers)L2