Contract analysis: scope, existence of a lease, components and exemptions

• Contract analysed (parties, subject matter, asset concerned, period of use, consideration)

  TextRequired

• Inception date of the lease

  DateRequired

  20X1-12-01

• Entity's position in the contract

  ChoiceRequired

  Lessee

  Lessee / Lessor

• Supplier's substitution rights and customer's decision-making and operating rights

  TextRequired

• Other contracts entered into at or near the same time with the same counterparty

  Text

• Total consideration in the contract to allocate

  NumberRequired

  150,000

• Components of the contract and stand-alone prices (one row per lease component, one row for the non-lease components)

  TableRequired

  LEASE_COMPONENT_1 · 96,000 | NON_LEASE_COMPONENTS · 64,000

• Component whose allocated consideration is detailed

  Choice

  Lease component 1

  Lease component 1 / Lease component 2 / Lease component 3 / Non-lease components (aggregate)

• Value of the underlying asset when new (low-value assessment)

  Number

• Total lease payments of the exempt lease

  Number

• Lease incentives received deducted from the expense basis (0 if none)

  Number

• Lease term of the exempt lease (in months)

  Number

• Evidence obtained and referenced (category, document reference)

  EvidenceRequired

IFRS 16 §3IFRS 16 §4

• Scope exclusions examined

  ChecklistRequired

  • Not a contract to explore for or use minerals, oil, natural gas or similar resources
  • Not a lease of biological assets within IAS 41 held by a lessee
  • Not a service concession arrangement within IFRIC 12
  • Not a licence of intellectual property granted by a lessor (IFRS 15) nor a lessee's licensing right within IAS 38
  • Lease of another intangible asset: application of IFRS 16 optional for the lessee

IFRS 16 §9IFRS 16 §10IFRS 16 §11IFRS 16 §B9IFRS 16 §B10IFRS 16 §B13IFRS 16 §B14IFRS 16 §B15IFRS 16 §B16IFRS 16 §B17IFRS 16 §B18IFRS 16 §B19IFRS 16 §B20IFRS 16 §B21IFRS 16 §B22IFRS 16 §B23IFRS 16 §B24IFRS 16 §B25IFRS 16 §B26IFRS 16 §B27IFRS 16 §B28IFRS 16 §B29IFRS 16 §B30IFRS 16 §B31

• Identified asset

  ChecklistRequired

  • Asset specified explicitly or implicitly when made available
  • No substantive substitution right of the supplier (practical ability and net economic benefit, assessed at inception; presumed not substantive when unclear)
  • Replacement for repair, maintenance or upgrade has no effect on identification
  • Physically distinct portion of capacity, or substantially all of the capacity

  Follow the flowchart of the standard: identified asset, then substantially all the benefits, then right to direct the use (para. B31). The assessment is made at the inception date and repeated only if the terms of the contract change (paras. 9 and 11).

• Substantially all of the economic benefits

  ChecklistRequired

  • Right to obtain substantially all the benefits from use throughout the period (primary output, by-products)
  • Benefits assessed within the contractual scope of use (territory, usage limit)
  • Payment of part of the cash flows (rent based on sales) has no effect on the analysis

• Right to direct the use

  ChecklistRequired

  • The customer directs how and for what purpose the asset is used throughout the period
  • Predetermined decisions: the customer operates the asset or designed it
  • Rights limited to operating or maintaining the asset: not sufficient on their own
  • Supplier's protective rights: define the scope without removing the right to direct
  • Control for only part of the term: lease for that part

IFRS 16 §B1IFRS 16 §B2

• Combination criteria (one is enough)

  Checklist

  • Negotiated as a package with an overall commercial objective
  • Consideration of one contract depends on the price or performance of the other
  • Rights of use forming a single lease component
  • Application to a portfolio of similar leases with no material effect expected

IFRS 16 §12IFRS 16 §13IFRS 16 §14IFRS 16 §15IFRS 16 §16IFRS 16 §17IFRS 16 §B32IFRS 16 §B33

• Identification and treatment of components

  ChecklistRequired

  • Each right to use a separable asset forms a separate lease component
  • Charges that transfer no good or service included in the total consideration
  • Stand-alone prices observable, or else estimated maximising observable information
  • Lessee: election by class of assets not to separate non-lease components
  • Lessor: allocation under IFRS 15, without the practical expedient

IFRS 16 §5IFRS 16 §6IFRS 16 §7IFRS 16 §8IFRS 16 §B3IFRS 16 §B4IFRS 16 §B5IFRS 16 §B6IFRS 16 §B7IFRS 16 §B8

• Conditions for the exemptions

  Checklist

  • Short-term lease: election made by class of underlying assets
  • Modification or change in the term of a short-term lease: treated as a new lease
  • Low value assessed when new, in absolute terms, whatever the size of the lessee
  • Asset usable on its own or with readily available resources, neither dependent nor interrelated
  • Asset not typically of high value when new (a car is excluded)
  • Asset neither subleased nor expected to be subleased
  • Straight-line expense over the term, or another more representative systematic basis

  The term of a short-term lease follows the definition in the standard (twelve months or less at the commencement date, with no purchase option). The exemptions are optional: they exempt from paragraphs 22 to 49 (para. 5).

IFRS 16 §6IFRS 16 §13

• Consideration allocated to the component detailed

  Calculation

  90,000

  Total consideration in the contract to allocate ; Components of the contract and stand-alone prices (one row per lease component, one row for the non-lease components) ; Component whose allocated consideration is detailed

  For the lessee, the consideration is allocated on the basis of the stand-alone price of each lease component and the aggregate stand-alone price of the non-lease components (para. 13). The price used for each row is a datum of the file or a documented estimate, never imposed by the standard.

• Total allocated to all components

  Calculation

  150,000

  Total consideration in the contract to allocate ; Components of the contract and stand-alone prices (one row per lease component, one row for the non-lease components) ; Component whose allocated consideration is detailed

• Straight-line monthly expense of the exempt lease

  Calculation

  Total lease payments of the exempt lease ; Lease incentives received deducted from the expense basis (0 if none) ; Lease term of the exempt lease (in months)

IFRS 16 §9IFRS 16 §B9IFRS 16 §B14IFRS 16 §B24IFRS 16 §5IFRS 16 §B3IFRS 16 §B4

• Is the contract, or does it contain, a lease?

  JudgmentRequired

  Lease (identified asset, benefits and right to direct all present)

  Lease (identified asset, benefits and right to direct all present) / Lease for only part of the term of the contract / No lease: service contract or other

• Rationale: facts relied on, analysis, alternative rejected

  TextRequired

• Exemption applied by the lessee

  JudgmentRequired

  No exemption: right-of-use asset and lease liability recognised

  Short-term lease exempted (election for the class) / Low-value asset exempted (lease-by-lease election) / No exemption: right-of-use asset and lease liability recognised / Not applicable: the contract does not contain a lease

  The standard sets no numerical low-value threshold: the amount used by the entity is a documented judgement, applied in the same way whatever the materiality of the lease for the lessee (para. B4).

• Rationale: facts relied on, analysis, alternative rejected

  TextRequired

• Paragraphs cited in this workpaper (verification status shown from the register)

  References

• The qualification of the contract is documentedPass
• The decision on the exemptions is documentedPass
• The consideration is fully allocated to the componentsPass

Assets

0

Liabilities

0

Profit or loss

0

OCI

0

Equity

0

• Contract analysed (parties, subject matter, asset concerned, period of use, consideration)

  TextRequired

• Inception date of the lease

  DateRequired

  20X1-12-01

• Entity's position in the contract

  ChoiceRequired

  Lessee

  Lessee / Lessor

• Supplier's substitution rights and customer's decision-making and operating rights

  TextRequired

• Other contracts entered into at or near the same time with the same counterparty

  Text

• Total consideration in the contract to allocate

  NumberRequired

  150,000

• Components of the contract and stand-alone prices (one row per lease component, one row for the non-lease components)

  TableRequired

  LEASE_COMPONENT_1 · 96,000 | NON_LEASE_COMPONENTS · 64,000

• Component whose allocated consideration is detailed

  Choice

  Non-lease components (aggregate)

  Lease component 1 / Lease component 2 / Lease component 3 / Non-lease components (aggregate)

• Value of the underlying asset when new (low-value assessment)

  Number

• Total lease payments of the exempt lease

  Number

• Lease incentives received deducted from the expense basis (0 if none)

  Number

• Lease term of the exempt lease (in months)

  Number

• Evidence obtained and referenced (category, document reference)

  EvidenceRequired

IFRS 16 §3IFRS 16 §4

• Scope exclusions examined

  ChecklistRequired

  • Not a contract to explore for or use minerals, oil, natural gas or similar resources
  • Not a lease of biological assets within IAS 41 held by a lessee
  • Not a service concession arrangement within IFRIC 12
  • Not a licence of intellectual property granted by a lessor (IFRS 15) nor a lessee's licensing right within IAS 38
  • Lease of another intangible asset: application of IFRS 16 optional for the lessee

IFRS 16 §9IFRS 16 §10IFRS 16 §11IFRS 16 §B9IFRS 16 §B10IFRS 16 §B13IFRS 16 §B14IFRS 16 §B15IFRS 16 §B16IFRS 16 §B17IFRS 16 §B18IFRS 16 §B19IFRS 16 §B20IFRS 16 §B21IFRS 16 §B22IFRS 16 §B23IFRS 16 §B24IFRS 16 §B25IFRS 16 §B26IFRS 16 §B27IFRS 16 §B28IFRS 16 §B29IFRS 16 §B30IFRS 16 §B31

• Identified asset

  ChecklistRequired

  • Asset specified explicitly or implicitly when made available
  • No substantive substitution right of the supplier (practical ability and net economic benefit, assessed at inception; presumed not substantive when unclear)
  • Replacement for repair, maintenance or upgrade has no effect on identification
  • Physically distinct portion of capacity, or substantially all of the capacity

  Follow the flowchart of the standard: identified asset, then substantially all the benefits, then right to direct the use (para. B31). The assessment is made at the inception date and repeated only if the terms of the contract change (paras. 9 and 11).

• Substantially all of the economic benefits

  ChecklistRequired

  • Right to obtain substantially all the benefits from use throughout the period (primary output, by-products)
  • Benefits assessed within the contractual scope of use (territory, usage limit)
  • Payment of part of the cash flows (rent based on sales) has no effect on the analysis

• Right to direct the use

  ChecklistRequired

  • The customer directs how and for what purpose the asset is used throughout the period
  • Predetermined decisions: the customer operates the asset or designed it
  • Rights limited to operating or maintaining the asset: not sufficient on their own
  • Supplier's protective rights: define the scope without removing the right to direct
  • Control for only part of the term: lease for that part

IFRS 16 §B1IFRS 16 §B2

• Combination criteria (one is enough)

  Checklist

  • Negotiated as a package with an overall commercial objective
  • Consideration of one contract depends on the price or performance of the other
  • Rights of use forming a single lease component
  • Application to a portfolio of similar leases with no material effect expected

IFRS 16 §12IFRS 16 §13IFRS 16 §14IFRS 16 §15IFRS 16 §16IFRS 16 §17IFRS 16 §B32IFRS 16 §B33

• Identification and treatment of components

  ChecklistRequired

  • Each right to use a separable asset forms a separate lease component
  • Charges that transfer no good or service included in the total consideration
  • Stand-alone prices observable, or else estimated maximising observable information
  • Lessee: election by class of assets not to separate non-lease components
  • Lessor: allocation under IFRS 15, without the practical expedient

IFRS 16 §5IFRS 16 §6IFRS 16 §7IFRS 16 §8IFRS 16 §B3IFRS 16 §B4IFRS 16 §B5IFRS 16 §B6IFRS 16 §B7IFRS 16 §B8

• Conditions for the exemptions

  Checklist

  • Short-term lease: election made by class of underlying assets
  • Modification or change in the term of a short-term lease: treated as a new lease
  • Low value assessed when new, in absolute terms, whatever the size of the lessee
  • Asset usable on its own or with readily available resources, neither dependent nor interrelated
  • Asset not typically of high value when new (a car is excluded)
  • Asset neither subleased nor expected to be subleased
  • Straight-line expense over the term, or another more representative systematic basis

  The term of a short-term lease follows the definition in the standard (twelve months or less at the commencement date, with no purchase option). The exemptions are optional: they exempt from paragraphs 22 to 49 (para. 5).

IFRS 16 §6IFRS 16 §13

• Consideration allocated to the component detailed

  Calculation

  60,000

  Total consideration in the contract to allocate ; Components of the contract and stand-alone prices (one row per lease component, one row for the non-lease components) ; Component whose allocated consideration is detailed

  For the lessee, the consideration is allocated on the basis of the stand-alone price of each lease component and the aggregate stand-alone price of the non-lease components (para. 13). The price used for each row is a datum of the file or a documented estimate, never imposed by the standard.

• Total allocated to all components

  Calculation

  150,000

  Total consideration in the contract to allocate ; Components of the contract and stand-alone prices (one row per lease component, one row for the non-lease components) ; Component whose allocated consideration is detailed

• Straight-line monthly expense of the exempt lease

  Calculation

  Total lease payments of the exempt lease ; Lease incentives received deducted from the expense basis (0 if none) ; Lease term of the exempt lease (in months)

IFRS 16 §9IFRS 16 §B9IFRS 16 §B14IFRS 16 §B24IFRS 16 §5IFRS 16 §B3IFRS 16 §B4

• Is the contract, or does it contain, a lease?

  JudgmentRequired

  Lease (identified asset, benefits and right to direct all present)

  Lease (identified asset, benefits and right to direct all present) / Lease for only part of the term of the contract / No lease: service contract or other

• Rationale: facts relied on, analysis, alternative rejected

  TextRequired

• Exemption applied by the lessee

  JudgmentRequired

  No exemption: right-of-use asset and lease liability recognised

  Short-term lease exempted (election for the class) / Low-value asset exempted (lease-by-lease election) / No exemption: right-of-use asset and lease liability recognised / Not applicable: the contract does not contain a lease

  The standard sets no numerical low-value threshold: the amount used by the entity is a documented judgement, applied in the same way whatever the materiality of the lease for the lessee (para. B4).

• Rationale: facts relied on, analysis, alternative rejected

  TextRequired

• Paragraphs cited in this workpaper (verification status shown from the register)

  References

• The qualification of the contract is documentedPass
• The decision on the exemptions is documentedPass
• The consideration is fully allocated to the componentsPass

Assets

0

Liabilities

0

Profit or loss

0

OCI

0

Equity

0

• Contract analysed (parties, subject matter, asset concerned, period of use, consideration)

  TextRequired

• Inception date of the lease

  DateRequired

  20X1-12-01

• Entity's position in the contract

  ChoiceRequired

  Lessee

  Lessee / Lessor

• Supplier's substitution rights and customer's decision-making and operating rights

  TextRequired

• Other contracts entered into at or near the same time with the same counterparty

  Text

• Total consideration in the contract to allocate

  NumberRequired

• Components of the contract and stand-alone prices (one row per lease component, one row for the non-lease components)

  TableRequired

• Component whose allocated consideration is detailed

  Choice

  Lease component 1 / Lease component 2 / Lease component 3 / Non-lease components (aggregate)

• Value of the underlying asset when new (low-value assessment)

  Number

• Total lease payments of the exempt lease

  Number

• Lease incentives received deducted from the expense basis (0 if none)

  Number

• Lease term of the exempt lease (in months)

  Number

• Evidence obtained and referenced (category, document reference)

  EvidenceRequired

IFRS 16 §3IFRS 16 §4

• Scope exclusions examined

  ChecklistRequired

  • Not a contract to explore for or use minerals, oil, natural gas or similar resources
  • Not a lease of biological assets within IAS 41 held by a lessee
  • Not a service concession arrangement within IFRIC 12
  • Not a licence of intellectual property granted by a lessor (IFRS 15) nor a lessee's licensing right within IAS 38
  • Lease of another intangible asset: application of IFRS 16 optional for the lessee

IFRS 16 §9IFRS 16 §10IFRS 16 §11IFRS 16 §B9IFRS 16 §B10IFRS 16 §B13IFRS 16 §B14IFRS 16 §B15IFRS 16 §B16IFRS 16 §B17IFRS 16 §B18IFRS 16 §B19IFRS 16 §B20IFRS 16 §B21IFRS 16 §B22IFRS 16 §B23IFRS 16 §B24IFRS 16 §B25IFRS 16 §B26IFRS 16 §B27IFRS 16 §B28IFRS 16 §B29IFRS 16 §B30IFRS 16 §B31

• Identified asset

  ChecklistRequired

  • Asset specified explicitly or implicitly when made available
  • No substantive substitution right of the supplier (practical ability and net economic benefit, assessed at inception; presumed not substantive when unclear)
  • Replacement for repair, maintenance or upgrade has no effect on identification
  • Physically distinct portion of capacity, or substantially all of the capacity

  Follow the flowchart of the standard: identified asset, then substantially all the benefits, then right to direct the use (para. B31). The assessment is made at the inception date and repeated only if the terms of the contract change (paras. 9 and 11).

• Substantially all of the economic benefits

  ChecklistRequired

  • Right to obtain substantially all the benefits from use throughout the period (primary output, by-products)
  • Benefits assessed within the contractual scope of use (territory, usage limit)
  • Payment of part of the cash flows (rent based on sales) has no effect on the analysis

• Right to direct the use

  ChecklistRequired

  • The customer directs how and for what purpose the asset is used throughout the period
  • Predetermined decisions: the customer operates the asset or designed it
  • Rights limited to operating or maintaining the asset: not sufficient on their own
  • Supplier's protective rights: define the scope without removing the right to direct
  • Control for only part of the term: lease for that part

IFRS 16 §B1IFRS 16 §B2

• Combination criteria (one is enough)

  Checklist

  • Negotiated as a package with an overall commercial objective
  • Consideration of one contract depends on the price or performance of the other
  • Rights of use forming a single lease component
  • Application to a portfolio of similar leases with no material effect expected

IFRS 16 §12IFRS 16 §13IFRS 16 §14IFRS 16 §15IFRS 16 §16IFRS 16 §17IFRS 16 §B32IFRS 16 §B33

• Identification and treatment of components

  ChecklistRequired

  • Each right to use a separable asset forms a separate lease component
  • Charges that transfer no good or service included in the total consideration
  • Stand-alone prices observable, or else estimated maximising observable information
  • Lessee: election by class of assets not to separate non-lease components
  • Lessor: allocation under IFRS 15, without the practical expedient

IFRS 16 §5IFRS 16 §6IFRS 16 §7IFRS 16 §8IFRS 16 §B3IFRS 16 §B4IFRS 16 §B5IFRS 16 §B6IFRS 16 §B7IFRS 16 §B8

• Conditions for the exemptions

  Checklist

  • Short-term lease: election made by class of underlying assets
  • Modification or change in the term of a short-term lease: treated as a new lease
  • Low value assessed when new, in absolute terms, whatever the size of the lessee
  • Asset usable on its own or with readily available resources, neither dependent nor interrelated
  • Asset not typically of high value when new (a car is excluded)
  • Asset neither subleased nor expected to be subleased
  • Straight-line expense over the term, or another more representative systematic basis

  The term of a short-term lease follows the definition in the standard (twelve months or less at the commencement date, with no purchase option). The exemptions are optional: they exempt from paragraphs 22 to 49 (para. 5).

IFRS 16 §6IFRS 16 §13

• Consideration allocated to the component detailed

  Calculation

  Total consideration in the contract to allocate ; Components of the contract and stand-alone prices (one row per lease component, one row for the non-lease components) ; Component whose allocated consideration is detailed

  For the lessee, the consideration is allocated on the basis of the stand-alone price of each lease component and the aggregate stand-alone price of the non-lease components (para. 13). The price used for each row is a datum of the file or a documented estimate, never imposed by the standard.

• Total allocated to all components

  Calculation

  Total consideration in the contract to allocate ; Components of the contract and stand-alone prices (one row per lease component, one row for the non-lease components) ; Component whose allocated consideration is detailed

• Straight-line monthly expense of the exempt lease

  Calculation

  Total lease payments of the exempt lease ; Lease incentives received deducted from the expense basis (0 if none) ; Lease term of the exempt lease (in months)

IFRS 16 §9IFRS 16 §B9IFRS 16 §B14IFRS 16 §B24IFRS 16 §5IFRS 16 §B3IFRS 16 §B4

• Is the contract, or does it contain, a lease?

  JudgmentRequired

  No lease: service contract or other

  Lease (identified asset, benefits and right to direct all present) / Lease for only part of the term of the contract / No lease: service contract or other

• Rationale: facts relied on, analysis, alternative rejected

  TextRequired

• Exemption applied by the lessee

  JudgmentRequired

  Not applicable: the contract does not contain a lease

  Short-term lease exempted (election for the class) / Low-value asset exempted (lease-by-lease election) / No exemption: right-of-use asset and lease liability recognised / Not applicable: the contract does not contain a lease

  The standard sets no numerical low-value threshold: the amount used by the entity is a documented judgement, applied in the same way whatever the materiality of the lease for the lessee (para. B4).

• Rationale: facts relied on, analysis, alternative rejected

  TextRequired

• Paragraphs cited in this workpaper (verification status shown from the register)

  References

• The qualification of the contract is documentedPass
• The decision on the exemptions is documentedPass
• The consideration is fully allocated to the componentsNot evaluated

Assets

0

Liabilities

0

Profit or loss

0

OCI

0

Equity

0

• Contract analysed (parties, subject matter, asset concerned, period of use, consideration)

  TextRequired

• Inception date of the lease

  DateRequired

  20X1-12-15

• Entity's position in the contract

  ChoiceRequired

  Lessee

  Lessee / Lessor

• Supplier's substitution rights and customer's decision-making and operating rights

  TextRequired

• Other contracts entered into at or near the same time with the same counterparty

  Text

• Total consideration in the contract to allocate

  NumberRequired

  11,520

• Components of the contract and stand-alone prices (one row per lease component, one row for the non-lease components)

  TableRequired

  LEASE_COMPONENT_1 · 11,520

• Component whose allocated consideration is detailed

  Choice

  Lease component 1

  Lease component 1 / Lease component 2 / Lease component 3 / Non-lease components (aggregate)

• Value of the underlying asset when new (low-value assessment)

  Number

  600

• Total lease payments of the exempt lease

  Number

  11,520

• Lease incentives received deducted from the expense basis (0 if none)

  Number

  0

• Lease term of the exempt lease (in months)

  Number

  24 months

• Evidence obtained and referenced (category, document reference)

  EvidenceRequired

IFRS 16 §3IFRS 16 §4

• Scope exclusions examined

  ChecklistRequired

  • Not a contract to explore for or use minerals, oil, natural gas or similar resources
  • Not a lease of biological assets within IAS 41 held by a lessee
  • Not a service concession arrangement within IFRIC 12
  • Not a licence of intellectual property granted by a lessor (IFRS 15) nor a lessee's licensing right within IAS 38
  • Lease of another intangible asset: application of IFRS 16 optional for the lessee

IFRS 16 §9IFRS 16 §10IFRS 16 §11IFRS 16 §B9IFRS 16 §B10IFRS 16 §B13IFRS 16 §B14IFRS 16 §B15IFRS 16 §B16IFRS 16 §B17IFRS 16 §B18IFRS 16 §B19IFRS 16 §B20IFRS 16 §B21IFRS 16 §B22IFRS 16 §B23IFRS 16 §B24IFRS 16 §B25IFRS 16 §B26IFRS 16 §B27IFRS 16 §B28IFRS 16 §B29IFRS 16 §B30IFRS 16 §B31

• Identified asset

  ChecklistRequired

  • Asset specified explicitly or implicitly when made available
  • No substantive substitution right of the supplier (practical ability and net economic benefit, assessed at inception; presumed not substantive when unclear)
  • Replacement for repair, maintenance or upgrade has no effect on identification
  • Physically distinct portion of capacity, or substantially all of the capacity

  Follow the flowchart of the standard: identified asset, then substantially all the benefits, then right to direct the use (para. B31). The assessment is made at the inception date and repeated only if the terms of the contract change (paras. 9 and 11).

• Substantially all of the economic benefits

  ChecklistRequired

  • Right to obtain substantially all the benefits from use throughout the period (primary output, by-products)
  • Benefits assessed within the contractual scope of use (territory, usage limit)
  • Payment of part of the cash flows (rent based on sales) has no effect on the analysis

• Right to direct the use

  ChecklistRequired

  • The customer directs how and for what purpose the asset is used throughout the period
  • Predetermined decisions: the customer operates the asset or designed it
  • Rights limited to operating or maintaining the asset: not sufficient on their own
  • Supplier's protective rights: define the scope without removing the right to direct
  • Control for only part of the term: lease for that part

IFRS 16 §B1IFRS 16 §B2

• Combination criteria (one is enough)

  Checklist

  • Negotiated as a package with an overall commercial objective
  • Consideration of one contract depends on the price or performance of the other
  • Rights of use forming a single lease component
  • Application to a portfolio of similar leases with no material effect expected

IFRS 16 §12IFRS 16 §13IFRS 16 §14IFRS 16 §15IFRS 16 §16IFRS 16 §17IFRS 16 §B32IFRS 16 §B33

• Identification and treatment of components

  ChecklistRequired

  • Each right to use a separable asset forms a separate lease component
  • Charges that transfer no good or service included in the total consideration
  • Stand-alone prices observable, or else estimated maximising observable information
  • Lessee: election by class of assets not to separate non-lease components
  • Lessor: allocation under IFRS 15, without the practical expedient

IFRS 16 §5IFRS 16 §6IFRS 16 §7IFRS 16 §8IFRS 16 §B3IFRS 16 §B4IFRS 16 §B5IFRS 16 §B6IFRS 16 §B7IFRS 16 §B8

• Conditions for the exemptions

  Checklist

  • Short-term lease: election made by class of underlying assets
  • Modification or change in the term of a short-term lease: treated as a new lease
  • Low value assessed when new, in absolute terms, whatever the size of the lessee
  • Asset usable on its own or with readily available resources, neither dependent nor interrelated
  • Asset not typically of high value when new (a car is excluded)
  • Asset neither subleased nor expected to be subleased
  • Straight-line expense over the term, or another more representative systematic basis

  The term of a short-term lease follows the definition in the standard (twelve months or less at the commencement date, with no purchase option). The exemptions are optional: they exempt from paragraphs 22 to 49 (para. 5).

IFRS 16 §6IFRS 16 §13

• Consideration allocated to the component detailed

  Calculation

  11,520

  Total consideration in the contract to allocate ; Components of the contract and stand-alone prices (one row per lease component, one row for the non-lease components) ; Component whose allocated consideration is detailed

  For the lessee, the consideration is allocated on the basis of the stand-alone price of each lease component and the aggregate stand-alone price of the non-lease components (para. 13). The price used for each row is a datum of the file or a documented estimate, never imposed by the standard.

• Total allocated to all components

  Calculation

  11,520

  Total consideration in the contract to allocate ; Components of the contract and stand-alone prices (one row per lease component, one row for the non-lease components) ; Component whose allocated consideration is detailed

• Straight-line monthly expense of the exempt lease

  Calculation

  480

  Total lease payments of the exempt lease ; Lease incentives received deducted from the expense basis (0 if none) ; Lease term of the exempt lease (in months)

IFRS 16 §9IFRS 16 §B9IFRS 16 §B14IFRS 16 §B24IFRS 16 §5IFRS 16 §B3IFRS 16 §B4

• Is the contract, or does it contain, a lease?

  JudgmentRequired

  Lease (identified asset, benefits and right to direct all present)

  Lease (identified asset, benefits and right to direct all present) / Lease for only part of the term of the contract / No lease: service contract or other

• Rationale: facts relied on, analysis, alternative rejected

  TextRequired

• Exemption applied by the lessee

  JudgmentRequired

  Low-value asset exempted (lease-by-lease election)

  Short-term lease exempted (election for the class) / Low-value asset exempted (lease-by-lease election) / No exemption: right-of-use asset and lease liability recognised / Not applicable: the contract does not contain a lease

  The standard sets no numerical low-value threshold: the amount used by the entity is a documented judgement, applied in the same way whatever the materiality of the lease for the lessee (para. B4).

• Rationale: facts relied on, analysis, alternative rejected

  TextRequired

• Paragraphs cited in this workpaper (verification status shown from the register)

  References

• The qualification of the contract is documentedPass
• The decision on the exemptions is documentedPass
• The consideration is fully allocated to the componentsPass

Assets

0

Liabilities

0

Profit or loss

0

OCI

0

Equity

0

• Contract analysed (parties, subject matter, asset concerned, period of use, consideration)

  TextRequired

• Inception date of the lease

  DateRequired

  20X5-01-01

• Entity's position in the contract

  ChoiceRequired

  Lessee

  Lessee / Lessor

• Supplier's substitution rights and customer's decision-making and operating rights

  TextRequired

• Other contracts entered into at or near the same time with the same counterparty

  Text

• Total consideration in the contract to allocate

  NumberRequired

• Components of the contract and stand-alone prices (one row per lease component, one row for the non-lease components)

  TableRequired

• Component whose allocated consideration is detailed

  Choice

  Lease component 1 / Lease component 2 / Lease component 3 / Non-lease components (aggregate)

• Value of the underlying asset when new (low-value assessment)

  Number

• Total lease payments of the exempt lease

  Number

• Lease incentives received deducted from the expense basis (0 if none)

  Number

• Lease term of the exempt lease (in months)

  Number

• Evidence obtained and referenced (category, document reference)

  EvidenceRequired

IFRS 16 §3IFRS 16 §4

• Scope exclusions examined

  ChecklistRequired

  • Not a contract to explore for or use minerals, oil, natural gas or similar resources
  • Not a lease of biological assets within IAS 41 held by a lessee
  • Not a service concession arrangement within IFRIC 12
  • Not a licence of intellectual property granted by a lessor (IFRS 15) nor a lessee's licensing right within IAS 38
  • Lease of another intangible asset: application of IFRS 16 optional for the lessee

IFRS 16 §9IFRS 16 §10IFRS 16 §11IFRS 16 §B9IFRS 16 §B10IFRS 16 §B13IFRS 16 §B14IFRS 16 §B15IFRS 16 §B16IFRS 16 §B17IFRS 16 §B18IFRS 16 §B19IFRS 16 §B20IFRS 16 §B21IFRS 16 §B22IFRS 16 §B23IFRS 16 §B24IFRS 16 §B25IFRS 16 §B26IFRS 16 §B27IFRS 16 §B28IFRS 16 §B29IFRS 16 §B30IFRS 16 §B31

• Identified asset

  ChecklistRequired

  • Asset specified explicitly or implicitly when made available
  • No substantive substitution right of the supplier (practical ability and net economic benefit, assessed at inception; presumed not substantive when unclear)
  • Replacement for repair, maintenance or upgrade has no effect on identification
  • Physically distinct portion of capacity, or substantially all of the capacity

  Follow the flowchart of the standard: identified asset, then substantially all the benefits, then right to direct the use (para. B31). The assessment is made at the inception date and repeated only if the terms of the contract change (paras. 9 and 11).

• Substantially all of the economic benefits

  ChecklistRequired

  • Right to obtain substantially all the benefits from use throughout the period (primary output, by-products)
  • Benefits assessed within the contractual scope of use (territory, usage limit)
  • Payment of part of the cash flows (rent based on sales) has no effect on the analysis

• Right to direct the use

  ChecklistRequired

  • The customer directs how and for what purpose the asset is used throughout the period
  • Predetermined decisions: the customer operates the asset or designed it
  • Rights limited to operating or maintaining the asset: not sufficient on their own
  • Supplier's protective rights: define the scope without removing the right to direct
  • Control for only part of the term: lease for that part

IFRS 16 §B1IFRS 16 §B2

• Combination criteria (one is enough)

  Checklist

  • Negotiated as a package with an overall commercial objective
  • Consideration of one contract depends on the price or performance of the other
  • Rights of use forming a single lease component
  • Application to a portfolio of similar leases with no material effect expected

IFRS 16 §12IFRS 16 §13IFRS 16 §14IFRS 16 §15IFRS 16 §16IFRS 16 §17IFRS 16 §B32IFRS 16 §B33

• Identification and treatment of components

  ChecklistRequired

  • Each right to use a separable asset forms a separate lease component
  • Charges that transfer no good or service included in the total consideration
  • Stand-alone prices observable, or else estimated maximising observable information
  • Lessee: election by class of assets not to separate non-lease components
  • Lessor: allocation under IFRS 15, without the practical expedient

IFRS 16 §5IFRS 16 §6IFRS 16 §7IFRS 16 §8IFRS 16 §B3IFRS 16 §B4IFRS 16 §B5IFRS 16 §B6IFRS 16 §B7IFRS 16 §B8

• Conditions for the exemptions

  Checklist

  • Short-term lease: election made by class of underlying assets
  • Modification or change in the term of a short-term lease: treated as a new lease
  • Low value assessed when new, in absolute terms, whatever the size of the lessee
  • Asset usable on its own or with readily available resources, neither dependent nor interrelated
  • Asset not typically of high value when new (a car is excluded)
  • Asset neither subleased nor expected to be subleased
  • Straight-line expense over the term, or another more representative systematic basis

  The term of a short-term lease follows the definition in the standard (twelve months or less at the commencement date, with no purchase option). The exemptions are optional: they exempt from paragraphs 22 to 49 (para. 5).

IFRS 16 §6IFRS 16 §13

• Consideration allocated to the component detailed

  Calculation

  Total consideration in the contract to allocate ; Components of the contract and stand-alone prices (one row per lease component, one row for the non-lease components) ; Component whose allocated consideration is detailed

  For the lessee, the consideration is allocated on the basis of the stand-alone price of each lease component and the aggregate stand-alone price of the non-lease components (para. 13). The price used for each row is a datum of the file or a documented estimate, never imposed by the standard.

• Total allocated to all components

  Calculation

  Total consideration in the contract to allocate ; Components of the contract and stand-alone prices (one row per lease component, one row for the non-lease components) ; Component whose allocated consideration is detailed

• Straight-line monthly expense of the exempt lease

  Calculation

  Total lease payments of the exempt lease ; Lease incentives received deducted from the expense basis (0 if none) ; Lease term of the exempt lease (in months)

IFRS 16 §9IFRS 16 §B9IFRS 16 §B14IFRS 16 §B24IFRS 16 §5IFRS 16 §B3IFRS 16 §B4

• Is the contract, or does it contain, a lease?

  JudgmentRequired

  No lease: service contract or other

  Lease (identified asset, benefits and right to direct all present) / Lease for only part of the term of the contract / No lease: service contract or other

• Rationale: facts relied on, analysis, alternative rejected

  TextRequired

• Exemption applied by the lessee

  JudgmentRequired

  No exemption: right-of-use asset and lease liability recognised

  Short-term lease exempted (election for the class) / Low-value asset exempted (lease-by-lease election) / No exemption: right-of-use asset and lease liability recognised / Not applicable: the contract does not contain a lease

  The standard sets no numerical low-value threshold: the amount used by the entity is a documented judgement, applied in the same way whatever the materiality of the lease for the lessee (para. B4).

• Rationale: facts relied on, analysis, alternative rejected

  TextRequired

• Paragraphs cited in this workpaper (verification status shown from the register)

  References

• The qualification of the contract is documentedPass
• The decision on the exemptions is documentedPass
• The consideration is fully allocated to the componentsNot evaluated

Assets

0

Liabilities

0

Profit or loss

0

OCI

0

Equity

0

• Contract analysed (parties, subject matter, asset concerned, period of use, consideration)

  TextRequired

• Inception date of the lease

  DateRequired

  20X4-10-15

• Entity's position in the contract

  ChoiceRequired

  Lessee

  Lessee / Lessor

• Supplier's substitution rights and customer's decision-making and operating rights

  TextRequired

• Other contracts entered into at or near the same time with the same counterparty

  Text

• Total consideration in the contract to allocate

  NumberRequired

• Components of the contract and stand-alone prices (one row per lease component, one row for the non-lease components)

  TableRequired

• Component whose allocated consideration is detailed

  Choice

  Lease component 1 / Lease component 2 / Lease component 3 / Non-lease components (aggregate)

• Value of the underlying asset when new (low-value assessment)

  Number

• Total lease payments of the exempt lease

  Number

• Lease incentives received deducted from the expense basis (0 if none)

  Number

• Lease term of the exempt lease (in months)

  Number

• Evidence obtained and referenced (category, document reference)

  EvidenceRequired

IFRS 16 §3IFRS 16 §4

• Scope exclusions examined

  ChecklistRequired

  • Not a contract to explore for or use minerals, oil, natural gas or similar resources
  • Not a lease of biological assets within IAS 41 held by a lessee
  • Not a service concession arrangement within IFRIC 12
  • Not a licence of intellectual property granted by a lessor (IFRS 15) nor a lessee's licensing right within IAS 38
  • Lease of another intangible asset: application of IFRS 16 optional for the lessee

IFRS 16 §9IFRS 16 §10IFRS 16 §11IFRS 16 §B9IFRS 16 §B10IFRS 16 §B13IFRS 16 §B14IFRS 16 §B15IFRS 16 §B16IFRS 16 §B17IFRS 16 §B18IFRS 16 §B19IFRS 16 §B20IFRS 16 §B21IFRS 16 §B22IFRS 16 §B23IFRS 16 §B24IFRS 16 §B25IFRS 16 §B26IFRS 16 §B27IFRS 16 §B28IFRS 16 §B29IFRS 16 §B30IFRS 16 §B31

• Identified asset

  ChecklistRequired

  • Asset specified explicitly or implicitly when made available
  • No substantive substitution right of the supplier (practical ability and net economic benefit, assessed at inception; presumed not substantive when unclear)
  • Replacement for repair, maintenance or upgrade has no effect on identification
  • Physically distinct portion of capacity, or substantially all of the capacity

  Follow the flowchart of the standard: identified asset, then substantially all the benefits, then right to direct the use (para. B31). The assessment is made at the inception date and repeated only if the terms of the contract change (paras. 9 and 11).

• Substantially all of the economic benefits

  ChecklistRequired

  • Right to obtain substantially all the benefits from use throughout the period (primary output, by-products)
  • Benefits assessed within the contractual scope of use (territory, usage limit)
  • Payment of part of the cash flows (rent based on sales) has no effect on the analysis

• Right to direct the use

  ChecklistRequired

  • The customer directs how and for what purpose the asset is used throughout the period
  • Predetermined decisions: the customer operates the asset or designed it
  • Rights limited to operating or maintaining the asset: not sufficient on their own
  • Supplier's protective rights: define the scope without removing the right to direct
  • Control for only part of the term: lease for that part

IFRS 16 §B1IFRS 16 §B2

• Combination criteria (one is enough)

  Checklist

  • Negotiated as a package with an overall commercial objective
  • Consideration of one contract depends on the price or performance of the other
  • Rights of use forming a single lease component
  • Application to a portfolio of similar leases with no material effect expected

IFRS 16 §12IFRS 16 §13IFRS 16 §14IFRS 16 §15IFRS 16 §16IFRS 16 §17IFRS 16 §B32IFRS 16 §B33

• Identification and treatment of components

  ChecklistRequired

  • Each right to use a separable asset forms a separate lease component
  • Charges that transfer no good or service included in the total consideration
  • Stand-alone prices observable, or else estimated maximising observable information
  • Lessee: election by class of assets not to separate non-lease components
  • Lessor: allocation under IFRS 15, without the practical expedient

IFRS 16 §5IFRS 16 §6IFRS 16 §7IFRS 16 §8IFRS 16 §B3IFRS 16 §B4IFRS 16 §B5IFRS 16 §B6IFRS 16 §B7IFRS 16 §B8

• Conditions for the exemptions

  Checklist

  • Short-term lease: election made by class of underlying assets
  • Modification or change in the term of a short-term lease: treated as a new lease
  • Low value assessed when new, in absolute terms, whatever the size of the lessee
  • Asset usable on its own or with readily available resources, neither dependent nor interrelated
  • Asset not typically of high value when new (a car is excluded)
  • Asset neither subleased nor expected to be subleased
  • Straight-line expense over the term, or another more representative systematic basis

  The term of a short-term lease follows the definition in the standard (twelve months or less at the commencement date, with no purchase option). The exemptions are optional: they exempt from paragraphs 22 to 49 (para. 5).

IFRS 16 §6IFRS 16 §13

• Consideration allocated to the component detailed

  Calculation

  Total consideration in the contract to allocate ; Components of the contract and stand-alone prices (one row per lease component, one row for the non-lease components) ; Component whose allocated consideration is detailed

  For the lessee, the consideration is allocated on the basis of the stand-alone price of each lease component and the aggregate stand-alone price of the non-lease components (para. 13). The price used for each row is a datum of the file or a documented estimate, never imposed by the standard.

• Total allocated to all components

  Calculation

  Total consideration in the contract to allocate ; Components of the contract and stand-alone prices (one row per lease component, one row for the non-lease components) ; Component whose allocated consideration is detailed

• Straight-line monthly expense of the exempt lease

  Calculation

  Total lease payments of the exempt lease ; Lease incentives received deducted from the expense basis (0 if none) ; Lease term of the exempt lease (in months)

IFRS 16 §9IFRS 16 §B9IFRS 16 §B14IFRS 16 §B24IFRS 16 §5IFRS 16 §B3IFRS 16 §B4

• Is the contract, or does it contain, a lease?

  JudgmentRequired

  Lease (identified asset, benefits and right to direct all present)

  Lease (identified asset, benefits and right to direct all present) / Lease for only part of the term of the contract / No lease: service contract or other

• Rationale: facts relied on, analysis, alternative rejected

  TextRequired

• Exemption applied by the lessee

  JudgmentRequired

  No exemption: right-of-use asset and lease liability recognised

  Short-term lease exempted (election for the class) / Low-value asset exempted (lease-by-lease election) / No exemption: right-of-use asset and lease liability recognised / Not applicable: the contract does not contain a lease

  The standard sets no numerical low-value threshold: the amount used by the entity is a documented judgement, applied in the same way whatever the materiality of the lease for the lessee (para. B4).

• Rationale: facts relied on, analysis, alternative rejected

  TextRequired

• Paragraphs cited in this workpaper (verification status shown from the register)

  References

• The qualification of the contract is documentedPass
• The decision on the exemptions is documentedPass
• The consideration is fully allocated to the componentsNot evaluated

Assets

0

Liabilities

0

Profit or loss

0

OCI

0

Equity

0

• Contract analysed (parties, subject matter, asset concerned, period of use, consideration)

  TextRequired

• Inception date of the lease

  DateRequired

  20X5-01-01

• Entity's position in the contract

  ChoiceRequired

  Lessee

  Lessee / Lessor

• Supplier's substitution rights and customer's decision-making and operating rights

  TextRequired

• Other contracts entered into at or near the same time with the same counterparty

  Text

• Total consideration in the contract to allocate

  NumberRequired

• Components of the contract and stand-alone prices (one row per lease component, one row for the non-lease components)

  TableRequired

• Component whose allocated consideration is detailed

  Choice

  Lease component 1 / Lease component 2 / Lease component 3 / Non-lease components (aggregate)

• Value of the underlying asset when new (low-value assessment)

  Number

• Total lease payments of the exempt lease

  Number

  48,000

• Lease incentives received deducted from the expense basis (0 if none)

  Number

  0

• Lease term of the exempt lease (in months)

  Number

  12 months

• Evidence obtained and referenced (category, document reference)

  EvidenceRequired

IFRS 16 §3IFRS 16 §4

• Scope exclusions examined

  ChecklistRequired

  • Not a contract to explore for or use minerals, oil, natural gas or similar resources
  • Not a lease of biological assets within IAS 41 held by a lessee
  • Not a service concession arrangement within IFRIC 12
  • Not a licence of intellectual property granted by a lessor (IFRS 15) nor a lessee's licensing right within IAS 38
  • Lease of another intangible asset: application of IFRS 16 optional for the lessee

IFRS 16 §9IFRS 16 §10IFRS 16 §11IFRS 16 §B9IFRS 16 §B10IFRS 16 §B13IFRS 16 §B14IFRS 16 §B15IFRS 16 §B16IFRS 16 §B17IFRS 16 §B18IFRS 16 §B19IFRS 16 §B20IFRS 16 §B21IFRS 16 §B22IFRS 16 §B23IFRS 16 §B24IFRS 16 §B25IFRS 16 §B26IFRS 16 §B27IFRS 16 §B28IFRS 16 §B29IFRS 16 §B30IFRS 16 §B31

• Identified asset

  ChecklistRequired

  • Asset specified explicitly or implicitly when made available
  • No substantive substitution right of the supplier (practical ability and net economic benefit, assessed at inception; presumed not substantive when unclear)
  • Replacement for repair, maintenance or upgrade has no effect on identification
  • Physically distinct portion of capacity, or substantially all of the capacity

  Follow the flowchart of the standard: identified asset, then substantially all the benefits, then right to direct the use (para. B31). The assessment is made at the inception date and repeated only if the terms of the contract change (paras. 9 and 11).

• Substantially all of the economic benefits

  ChecklistRequired

  • Right to obtain substantially all the benefits from use throughout the period (primary output, by-products)
  • Benefits assessed within the contractual scope of use (territory, usage limit)
  • Payment of part of the cash flows (rent based on sales) has no effect on the analysis

• Right to direct the use

  ChecklistRequired

  • The customer directs how and for what purpose the asset is used throughout the period
  • Predetermined decisions: the customer operates the asset or designed it
  • Rights limited to operating or maintaining the asset: not sufficient on their own
  • Supplier's protective rights: define the scope without removing the right to direct
  • Control for only part of the term: lease for that part

IFRS 16 §B1IFRS 16 §B2

• Combination criteria (one is enough)

  Checklist

  • Negotiated as a package with an overall commercial objective
  • Consideration of one contract depends on the price or performance of the other
  • Rights of use forming a single lease component
  • Application to a portfolio of similar leases with no material effect expected

IFRS 16 §12IFRS 16 §13IFRS 16 §14IFRS 16 §15IFRS 16 §16IFRS 16 §17IFRS 16 §B32IFRS 16 §B33

• Identification and treatment of components

  ChecklistRequired

  • Each right to use a separable asset forms a separate lease component
  • Charges that transfer no good or service included in the total consideration
  • Stand-alone prices observable, or else estimated maximising observable information
  • Lessee: election by class of assets not to separate non-lease components
  • Lessor: allocation under IFRS 15, without the practical expedient

IFRS 16 §5IFRS 16 §6IFRS 16 §7IFRS 16 §8IFRS 16 §B3IFRS 16 §B4IFRS 16 §B5IFRS 16 §B6IFRS 16 §B7IFRS 16 §B8

• Conditions for the exemptions

  Checklist

  • Short-term lease: election made by class of underlying assets
  • Modification or change in the term of a short-term lease: treated as a new lease
  • Low value assessed when new, in absolute terms, whatever the size of the lessee
  • Asset usable on its own or with readily available resources, neither dependent nor interrelated
  • Asset not typically of high value when new (a car is excluded)
  • Asset neither subleased nor expected to be subleased
  • Straight-line expense over the term, or another more representative systematic basis

  The term of a short-term lease follows the definition in the standard (twelve months or less at the commencement date, with no purchase option). The exemptions are optional: they exempt from paragraphs 22 to 49 (para. 5).

IFRS 16 §6IFRS 16 §13

• Consideration allocated to the component detailed

  Calculation

  Total consideration in the contract to allocate ; Components of the contract and stand-alone prices (one row per lease component, one row for the non-lease components) ; Component whose allocated consideration is detailed

  For the lessee, the consideration is allocated on the basis of the stand-alone price of each lease component and the aggregate stand-alone price of the non-lease components (para. 13). The price used for each row is a datum of the file or a documented estimate, never imposed by the standard.

• Total allocated to all components

  Calculation

  Total consideration in the contract to allocate ; Components of the contract and stand-alone prices (one row per lease component, one row for the non-lease components) ; Component whose allocated consideration is detailed

• Straight-line monthly expense of the exempt lease

  Calculation

  4,000

  Total lease payments of the exempt lease ; Lease incentives received deducted from the expense basis (0 if none) ; Lease term of the exempt lease (in months)

IFRS 16 §9IFRS 16 §B9IFRS 16 §B14IFRS 16 §B24IFRS 16 §5IFRS 16 §B3IFRS 16 §B4

• Is the contract, or does it contain, a lease?

  JudgmentRequired

  Lease (identified asset, benefits and right to direct all present)

  Lease (identified asset, benefits and right to direct all present) / Lease for only part of the term of the contract / No lease: service contract or other

• Rationale: facts relied on, analysis, alternative rejected

  TextRequired

• Exemption applied by the lessee

  JudgmentRequired

  Short-term lease exempted (election for the class)

  Short-term lease exempted (election for the class) / Low-value asset exempted (lease-by-lease election) / No exemption: right-of-use asset and lease liability recognised / Not applicable: the contract does not contain a lease

  The standard sets no numerical low-value threshold: the amount used by the entity is a documented judgement, applied in the same way whatever the materiality of the lease for the lessee (para. B4).

• Rationale: facts relied on, analysis, alternative rejected

  TextRequired

• Paragraphs cited in this workpaper (verification status shown from the register)

  References

• The qualification of the contract is documentedPass
• The decision on the exemptions is documentedPass
• The consideration is fully allocated to the componentsNot evaluated

Assets

0

Liabilities

0

Profit or loss

0

OCI

0

Equity

0

• Contract analysed (parties, subject matter, asset concerned, period of use, consideration)

  TextRequired

• Inception date of the lease

  DateRequired

• Entity's position in the contract

  ChoiceRequired

  Lessee

  Lessee / Lessor

• Supplier's substitution rights and customer's decision-making and operating rights

  TextRequired

• Other contracts entered into at or near the same time with the same counterparty

  Text

• Total consideration in the contract to allocate

  NumberRequired

• Components of the contract and stand-alone prices (one row per lease component, one row for the non-lease components)

  TableRequired

• Component whose allocated consideration is detailed

  Choice

  Lease component 1 / Lease component 2 / Lease component 3 / Non-lease components (aggregate)

• Value of the underlying asset when new (low-value assessment)

  Number

  450

• Total lease payments of the exempt lease

  Number

  135,000

• Lease incentives received deducted from the expense basis (0 if none)

  Number

  0

• Lease term of the exempt lease (in months)

  Number

  36 months

• Evidence obtained and referenced (category, document reference)

  EvidenceRequired

IFRS 16 §3IFRS 16 §4

• Scope exclusions examined

  ChecklistRequired

  • Not a contract to explore for or use minerals, oil, natural gas or similar resources
  • Not a lease of biological assets within IAS 41 held by a lessee
  • Not a service concession arrangement within IFRIC 12
  • Not a licence of intellectual property granted by a lessor (IFRS 15) nor a lessee's licensing right within IAS 38
  • Lease of another intangible asset: application of IFRS 16 optional for the lessee

IFRS 16 §9IFRS 16 §10IFRS 16 §11IFRS 16 §B9IFRS 16 §B10IFRS 16 §B13IFRS 16 §B14IFRS 16 §B15IFRS 16 §B16IFRS 16 §B17IFRS 16 §B18IFRS 16 §B19IFRS 16 §B20IFRS 16 §B21IFRS 16 §B22IFRS 16 §B23IFRS 16 §B24IFRS 16 §B25IFRS 16 §B26IFRS 16 §B27IFRS 16 §B28IFRS 16 §B29IFRS 16 §B30IFRS 16 §B31

• Identified asset

  ChecklistRequired

  • Asset specified explicitly or implicitly when made available
  • No substantive substitution right of the supplier (practical ability and net economic benefit, assessed at inception; presumed not substantive when unclear)
  • Replacement for repair, maintenance or upgrade has no effect on identification
  • Physically distinct portion of capacity, or substantially all of the capacity

  Follow the flowchart of the standard: identified asset, then substantially all the benefits, then right to direct the use (para. B31). The assessment is made at the inception date and repeated only if the terms of the contract change (paras. 9 and 11).

• Substantially all of the economic benefits

  ChecklistRequired

  • Right to obtain substantially all the benefits from use throughout the period (primary output, by-products)
  • Benefits assessed within the contractual scope of use (territory, usage limit)
  • Payment of part of the cash flows (rent based on sales) has no effect on the analysis

• Right to direct the use

  ChecklistRequired

  • The customer directs how and for what purpose the asset is used throughout the period
  • Predetermined decisions: the customer operates the asset or designed it
  • Rights limited to operating or maintaining the asset: not sufficient on their own
  • Supplier's protective rights: define the scope without removing the right to direct
  • Control for only part of the term: lease for that part

IFRS 16 §B1IFRS 16 §B2

• Combination criteria (one is enough)

  Checklist

  • Negotiated as a package with an overall commercial objective
  • Consideration of one contract depends on the price or performance of the other
  • Rights of use forming a single lease component
  • Application to a portfolio of similar leases with no material effect expected

IFRS 16 §12IFRS 16 §13IFRS 16 §14IFRS 16 §15IFRS 16 §16IFRS 16 §17IFRS 16 §B32IFRS 16 §B33

• Identification and treatment of components

  ChecklistRequired

  • Each right to use a separable asset forms a separate lease component
  • Charges that transfer no good or service included in the total consideration
  • Stand-alone prices observable, or else estimated maximising observable information
  • Lessee: election by class of assets not to separate non-lease components
  • Lessor: allocation under IFRS 15, without the practical expedient

IFRS 16 §5IFRS 16 §6IFRS 16 §7IFRS 16 §8IFRS 16 §B3IFRS 16 §B4IFRS 16 §B5IFRS 16 §B6IFRS 16 §B7IFRS 16 §B8

• Conditions for the exemptions

  Checklist

  • Short-term lease: election made by class of underlying assets
  • Modification or change in the term of a short-term lease: treated as a new lease
  • Low value assessed when new, in absolute terms, whatever the size of the lessee
  • Asset usable on its own or with readily available resources, neither dependent nor interrelated
  • Asset not typically of high value when new (a car is excluded)
  • Asset neither subleased nor expected to be subleased
  • Straight-line expense over the term, or another more representative systematic basis

  The term of a short-term lease follows the definition in the standard (twelve months or less at the commencement date, with no purchase option). The exemptions are optional: they exempt from paragraphs 22 to 49 (para. 5).

IFRS 16 §6IFRS 16 §13

• Consideration allocated to the component detailed

  Calculation

  Total consideration in the contract to allocate ; Components of the contract and stand-alone prices (one row per lease component, one row for the non-lease components) ; Component whose allocated consideration is detailed

  For the lessee, the consideration is allocated on the basis of the stand-alone price of each lease component and the aggregate stand-alone price of the non-lease components (para. 13). The price used for each row is a datum of the file or a documented estimate, never imposed by the standard.

• Total allocated to all components

  Calculation

  Total consideration in the contract to allocate ; Components of the contract and stand-alone prices (one row per lease component, one row for the non-lease components) ; Component whose allocated consideration is detailed

• Straight-line monthly expense of the exempt lease

  Calculation

  3,750

  Total lease payments of the exempt lease ; Lease incentives received deducted from the expense basis (0 if none) ; Lease term of the exempt lease (in months)

IFRS 16 §9IFRS 16 §B9IFRS 16 §B14IFRS 16 §B24IFRS 16 §5IFRS 16 §B3IFRS 16 §B4

• Is the contract, or does it contain, a lease?

  JudgmentRequired

  Lease (identified asset, benefits and right to direct all present)

  Lease (identified asset, benefits and right to direct all present) / Lease for only part of the term of the contract / No lease: service contract or other

• Rationale: facts relied on, analysis, alternative rejected

  TextRequired

• Exemption applied by the lessee

  JudgmentRequired

  Low-value asset exempted (lease-by-lease election)

  Short-term lease exempted (election for the class) / Low-value asset exempted (lease-by-lease election) / No exemption: right-of-use asset and lease liability recognised / Not applicable: the contract does not contain a lease

  The standard sets no numerical low-value threshold: the amount used by the entity is a documented judgement, applied in the same way whatever the materiality of the lease for the lessee (para. B4).

• Rationale: facts relied on, analysis, alternative rejected

  TextRequired

• Paragraphs cited in this workpaper (verification status shown from the register)

  References

• The qualification of the contract is documentedPass
• The decision on the exemptions is documentedPass
• The consideration is fully allocated to the componentsNot evaluated

Assets

0

Liabilities

0

Profit or loss

0

OCI

0

Equity

0