Lease inception date
At inception, assess whether the contract is or contains a lease. Distinguish the commencement date, when the lessor makes the underlying asset available for use; a lessee generally recognises the right-of-use asset and lease liability at commencement. Subsequent reassessment rules apply where required. The date on which the contract is signed is not automatically the commencement date.
Worked example
The parties commit to principal terms on 1 January and the asset is made available on 1 February. Inception is 1 January; the lessee generally recognises the lease liability and right-of-use asset at commencement on 1 February.
Common mistake
Treating lease inception and commencement as necessarily the same date or recognising the lessee’s right-of-use asset merely when negotiations begin.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | FR | Direct | September 2026–June 2027 |
| ACCA | SBR | Direct | September 2026–June 2027 |