Lease term and discount rate of the lessee

• Lease analysed (underlying asset, parties, commencement date)

  TextRequired

• Commencement date of the lease

  DateRequired

  20X2-01-01

• Non-cancellable period (in years), including rent-free periods

  NumberRequired

  3 years

• Options in the contract (extension, termination, purchase) and economic factors

  Table

  TERMINATION_OPTION · TERMINATION · 1 | EXTENSION_OPTION · EXTENSION · 2

• Lease term retained (in years)

  NumberRequired

  4 years

• Interest rate implicit in the lease, if it can be readily determined

  Number

• Lessee's incremental borrowing rate (similar term, security and environment)

  Number

• Lease payment not yet paid at the commencement date no. 1

  Number

  Enter only the payments not yet paid at the commencement date, grouped by due date: fixed payments (including in-substance fixed payments) less lease incentives receivable, variable payments that depend on an index or a rate measured at the commencement date, amounts expected under a residual value guarantee, the exercise price of a purchase option reasonably certain to be exercised, termination penalties if the lease term reflects termination (paras. 26 and 27). Enter 0 for an unused row; the timing is expressed in the same periodicity as the rate.

• Timing of payment no. 1 (number of periods from the commencement date)

  Number

• Lease payment not yet paid at the commencement date no. 2

  Number

• Timing of payment no. 2 (number of periods from the commencement date)

  Number

• Lease payment not yet paid at the commencement date no. 3

  Number

• Timing of payment no. 3 (number of periods from the commencement date)

  Number

• Lease payment not yet paid at the commencement date no. 4

  Number

• Timing of payment no. 4 (number of periods from the commencement date)

  Number

• Lease payment not yet paid at the commencement date no. 5

  Number

• Timing of payment no. 5 (number of periods from the commencement date)

  Number

• Periodic discount rate retained (interest rate implicit in the lease or lessee's incremental borrowing rate)

  Number

  The payments, the rate and the lease liability are entered when the workpaper is also used to measure the lease liability. For an analysis of the lease term only, they stay empty: the choice of rate and the check on the lease liability are then shown as not covered.

• Lease liability at the commencement date (sum of the present values below)

  Number

• Evidence obtained and referenced (category, document reference)

  EvidenceRequired

IFRS 16 §18IFRS 16 §19IFRS 16 §B34IFRS 16 §B35IFRS 16 §B36IFRS 16 §B37IFRS 16 §B38IFRS 16 §B39IFRS 16 §B40

• Components of the term

  ChecklistRequired

  • Enforceable period: ends when each party can terminate without the consent of the other, with no more than an insignificant penalty
  • Termination option of the lessee alone considered; option of the lessor alone included in the non-cancellable period
  • Term beginning at the commencement date, rent-free periods included
  • Extension periods reasonably certain added
  • Periods covered by a termination option reasonably certain not to be exercised added

• Factors creating an economic incentive

  Checklist

  • Terms of the optional periods compared with market rates
  • Significant leasehold improvements providing a benefit at the exercise date
  • Costs relating to termination (negotiation, relocation, restoration)
  • Importance of the asset to the lessee's operations
  • Option combined with a residual value guarantee ensuring a substantially similar return
  • Short non-cancellable period making extension more likely
  • Lessee's past practice and economic reasons

• Subsequent monitoring of the term

  Checklist

  • Significant event within the control of the lessee: reassessment of the option
  • Change in the non-cancellable period: revision of the term

IFRS 16 §26IFRS 16 §27IFRS 16 §28IFRS 16 §B42

• Checks on payments and rate

  Checklist

  • Implicit rate used if readily determinable, otherwise incremental borrowing rate
  • Payments retained consistent with the term and the options retained
  • Variable payments linked to an index measured with the index or rate at the commencement date
  • In-substance fixed payments identified

IFRS 16 §26IFRS 16 §27

• Present value of payment no. 1

  CalculationRequired

  Lease payment not yet paid at the commencement date no. 1 ; Periodic discount rate retained (interest rate implicit in the lease or lessee's incremental borrowing rate) ; Timing of payment no. 1 (number of periods from the commencement date)

• Present value of payment no. 2

  Calculation

  Lease payment not yet paid at the commencement date no. 2 ; Periodic discount rate retained (interest rate implicit in the lease or lessee's incremental borrowing rate) ; Timing of payment no. 2 (number of periods from the commencement date)

• Present value of payment no. 3

  Calculation

  Lease payment not yet paid at the commencement date no. 3 ; Periodic discount rate retained (interest rate implicit in the lease or lessee's incremental borrowing rate) ; Timing of payment no. 3 (number of periods from the commencement date)

• Present value of payment no. 4

  Calculation

  Lease payment not yet paid at the commencement date no. 4 ; Periodic discount rate retained (interest rate implicit in the lease or lessee's incremental borrowing rate) ; Timing of payment no. 4 (number of periods from the commencement date)

• Present value of payment no. 5

  Calculation

  Lease payment not yet paid at the commencement date no. 5 ; Periodic discount rate retained (interest rate implicit in the lease or lessee's incremental borrowing rate) ; Timing of payment no. 5 (number of periods from the commencement date)

IFRS 16 §18IFRS 16 §19IFRS 16 §B37IFRS 16 §26

• Options reflected in the lease term

  JudgmentRequired

  Period covered by a termination option reasonably certain not to be exercised included

  Non-cancellable period only (no option reasonably certain) / Extension period reasonably certain included / Period covered by a termination option reasonably certain not to be exercised included

• Rationale: facts relied on, analysis, alternative rejected

  TextRequired

• Discount rate retained

  JudgmentRequired

  Interest rate implicit in the lease (readily determinable) / Lessee's incremental borrowing rate

  The standard sets the hierarchy (implicit rate if readily determinable, otherwise incremental borrowing rate, para. 26) but not the method for building the incremental borrowing rate: that method and its inputs are documented judgements.

• Rationale: facts relied on, analysis, alternative rejected

  TextRequired

IFRS 16 §18IFRS 16 §26

• Items documented for the note (Disclosure workpaper)

  Checklist

  • Options not reflected in the term and the related payments
  • Nature of the rate retained (implicit or incremental borrowing) and main inputs

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

  References

• The lease term retained is documentedPass
• The choice of rate is documentedNot evaluated
• The lease liability equals the sum of the present valuesNot evaluated

Assets

0

Liabilities

0

Profit or loss

0

OCI

0

Equity

0

• Lease analysed (underlying asset, parties, commencement date)

  TextRequired

• Commencement date of the lease

  DateRequired

  20X5-01-01

• Non-cancellable period (in years), including rent-free periods

  NumberRequired

  2 years

• Options in the contract (extension, termination, purchase) and economic factors

  Table

  EXTENSION_OPTION · EXTENSION · 2

• Lease term retained (in years)

  NumberRequired

  4 years

• Interest rate implicit in the lease, if it can be readily determined

  Number

• Lessee's incremental borrowing rate (similar term, security and environment)

  Number

  5 %

• Lease payment not yet paid at the commencement date no. 1

  Number

  120,000

  Enter only the payments not yet paid at the commencement date, grouped by due date: fixed payments (including in-substance fixed payments) less lease incentives receivable, variable payments that depend on an index or a rate measured at the commencement date, amounts expected under a residual value guarantee, the exercise price of a purchase option reasonably certain to be exercised, termination penalties if the lease term reflects termination (paras. 26 and 27). Enter 0 for an unused row; the timing is expressed in the same periodicity as the rate.

• Timing of payment no. 1 (number of periods from the commencement date)

  Number

  1 units

• Lease payment not yet paid at the commencement date no. 2

  Number

  120,000

• Timing of payment no. 2 (number of periods from the commencement date)

  Number

  2 units

• Lease payment not yet paid at the commencement date no. 3

  Number

  120,000

• Timing of payment no. 3 (number of periods from the commencement date)

  Number

  3 units

• Lease payment not yet paid at the commencement date no. 4

  Number

  0

• Timing of payment no. 4 (number of periods from the commencement date)

  Number

  0 units

• Lease payment not yet paid at the commencement date no. 5

  Number

  0

• Timing of payment no. 5 (number of periods from the commencement date)

  Number

  0 units

• Periodic discount rate retained (interest rate implicit in the lease or lessee's incremental borrowing rate)

  Number

  5 %

  The payments, the rate and the lease liability are entered when the workpaper is also used to measure the lease liability. For an analysis of the lease term only, they stay empty: the choice of rate and the check on the lease liability are then shown as not covered.

• Lease liability at the commencement date (sum of the present values below)

  Number

  326,789.76

• Evidence obtained and referenced (category, document reference)

  EvidenceRequired

IFRS 16 §18IFRS 16 §19IFRS 16 §B34IFRS 16 §B35IFRS 16 §B36IFRS 16 §B37IFRS 16 §B38IFRS 16 §B39IFRS 16 §B40

• Components of the term

  ChecklistRequired

  • Enforceable period: ends when each party can terminate without the consent of the other, with no more than an insignificant penalty
  • Termination option of the lessee alone considered; option of the lessor alone included in the non-cancellable period
  • Term beginning at the commencement date, rent-free periods included
  • Extension periods reasonably certain added
  • Periods covered by a termination option reasonably certain not to be exercised added

• Factors creating an economic incentive

  Checklist

  • Terms of the optional periods compared with market rates
  • Significant leasehold improvements providing a benefit at the exercise date
  • Costs relating to termination (negotiation, relocation, restoration)
  • Importance of the asset to the lessee's operations
  • Option combined with a residual value guarantee ensuring a substantially similar return
  • Short non-cancellable period making extension more likely
  • Lessee's past practice and economic reasons

• Subsequent monitoring of the term

  Checklist

  • Significant event within the control of the lessee: reassessment of the option
  • Change in the non-cancellable period: revision of the term

IFRS 16 §26IFRS 16 §27IFRS 16 §28IFRS 16 §B42

• Checks on payments and rate

  Checklist

  • Implicit rate used if readily determinable, otherwise incremental borrowing rate
  • Payments retained consistent with the term and the options retained
  • Variable payments linked to an index measured with the index or rate at the commencement date
  • In-substance fixed payments identified

IFRS 16 §26IFRS 16 §27

• Present value of payment no. 1

  CalculationRequired

  114,285.71

  Lease payment not yet paid at the commencement date no. 1 ; Periodic discount rate retained (interest rate implicit in the lease or lessee's incremental borrowing rate) ; Timing of payment no. 1 (number of periods from the commencement date)

• Present value of payment no. 2

  Calculation

  108,843.54

  Lease payment not yet paid at the commencement date no. 2 ; Periodic discount rate retained (interest rate implicit in the lease or lessee's incremental borrowing rate) ; Timing of payment no. 2 (number of periods from the commencement date)

• Present value of payment no. 3

  Calculation

  103,660.51

  Lease payment not yet paid at the commencement date no. 3 ; Periodic discount rate retained (interest rate implicit in the lease or lessee's incremental borrowing rate) ; Timing of payment no. 3 (number of periods from the commencement date)

• Present value of payment no. 4

  Calculation

  0

  Lease payment not yet paid at the commencement date no. 4 ; Periodic discount rate retained (interest rate implicit in the lease or lessee's incremental borrowing rate) ; Timing of payment no. 4 (number of periods from the commencement date)

• Present value of payment no. 5

  Calculation

  0

  Lease payment not yet paid at the commencement date no. 5 ; Periodic discount rate retained (interest rate implicit in the lease or lessee's incremental borrowing rate) ; Timing of payment no. 5 (number of periods from the commencement date)

IFRS 16 §18IFRS 16 §19IFRS 16 §B37IFRS 16 §26

• Options reflected in the lease term

  JudgmentRequired

  Extension period reasonably certain included

  Non-cancellable period only (no option reasonably certain) / Extension period reasonably certain included / Period covered by a termination option reasonably certain not to be exercised included

• Rationale: facts relied on, analysis, alternative rejected

  TextRequired

• Discount rate retained

  JudgmentRequired

  Lessee's incremental borrowing rate

  Interest rate implicit in the lease (readily determinable) / Lessee's incremental borrowing rate

  The standard sets the hierarchy (implicit rate if readily determinable, otherwise incremental borrowing rate, para. 26) but not the method for building the incremental borrowing rate: that method and its inputs are documented judgements.

• Rationale: facts relied on, analysis, alternative rejected

  TextRequired

IFRS 16 §18IFRS 16 §26

• Items documented for the note (Disclosure workpaper)

  Checklist

  • Options not reflected in the term and the related payments
  • Nature of the rate retained (implicit or incremental borrowing) and main inputs

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

  References

• The lease term retained is documentedPass
• The choice of rate is documentedPass
• The lease liability equals the sum of the present valuesPass

Assets

0

Liabilities

0

Profit or loss

0

OCI

0

Equity

0