Lease
A lease conveys the right to control the use of an identified asset for a period of time in exchange for consideration. IFRS 16 generally requires lessees to recognise a right-of-use asset and lease liability, with recognition exemptions available for eligible short-term and low-value leases.
Worked example
A company leases office space for several years; the auditor inspects the contract and tests the liability and right-of-use asset.
Common mistake
Do not assume the short-term or low-value exemption applies automatically without considering eligibility and the lessee’s election.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | AAA (INT) | Supporting | September 2026–June 2027 |
| ACCA | FR | Direct | September 2026–June 2027 |
| ACCA | SBR | Direct | September 2026–June 2027 |