IFRS 16- Lease Accounting.

Lessees

Almost all leases are recognised in the statement of financial position as a ‘right-of-use’ asset and a lease liability. There are narrow exceptions to this recognition principle for leases where the underlying asset is of low-value and for short-term leases (i.e. those with a lease term of twelve months or less). The asset is subsequently accounted for in accordance with the cost or revaluation model in IAS 16

Property, Plant and Equipment

 (IAS 16) or, if the right-of-use asset meets the definition of investment property, in accordance with the requirements of IAS 40

Investment Property (the fair value model is required if the lessee measures investment property at fair value). The liability and right-of-use asset are unwound over the term of the lease giving rise to an interest expense and depreciation charge, respectively.