
COMMISSION REGULATION (EU) 2017/1986 of 31 October 2017 amending Regulation (EC) No 1126/2008 adopting certain international accounting standards in accordance with Regulation (EC) No 1606/2002 of the European Parliament and of the Council as regards International Financial Reporting Standard 16 (Text with EEA relevance) (revoked) 

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Article 1 
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Article 2 
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Article 3 
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ANNEX
International Financial Reporting Standard 16 Leases 
International Financial Reporting Standard 16 Leases 
OBJECTIVE 
 1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
 2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SCOPE 
 3. An entity shall apply this Standard to all leases, including leases of right-of-use assets in a sublease, except for: 

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 4. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
RECOGNITION EXEMPTIONS (PARAGRAPHS B3–B8) 
 5. A lessee may elect not to apply the requirements in paragraphs 22–49 to: 

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 6. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
 7. If a lessee accounts for short-term leases applying paragraph 6, the lessee shall consider the lease to be a new lease for the purposes of this Standard if: 

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 8. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
IDENTIFYING A LEASE (PARAGRAPHS B9–B33) 
 9. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
 10. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
 11. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Separating components of a contract 
 12. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Lessee 
 13. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
 14. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
 15. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
 16. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Lessor 
 17. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
LEASE TERM (PARAGRAPHS B34–B41) 
 18. An entity shall determine the lease term as the non-cancellable period of a lease, together with both: 

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 19. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
 20. A lessee shall reassess whether it is reasonably certain to exercise an extension option, or not to exercise a termination option, upon the occurrence of either a significant event or a significant change in circumstances that: 

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 21. An entity shall revise the lease term if there is a change in the non-cancellable period of a lease. For example, the non-cancellable period of a lease will change if: 

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LESSEE 
Recognition 
 22. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Measurement 
Initial measurement 
Initial measurement of the right-of-use asset 
 23. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
 24. The cost of the right-of-use asset shall comprise: 

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 25. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Initial measurement of the lease liability 
 26. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
 27. At the commencement date, the lease payments included in the measurement of the lease liability comprise the following payments for the right to use the underlying asset during the lease term that are not paid at the commencement date: 

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 28. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Subsequent measurement 
Subsequent measurement of the right-of-use asset 
 29. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cost model 
 30. To apply a cost model, a lessee shall measure the right-of-use asset at cost: 

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 31. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
 32. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
 33. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other measurement models 
 34. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
 35. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Subsequent measurement of the lease liability 
 36. After the commencement date, a lessee shall measure the lease liability by: 


((a)) increasing the carrying amount to reflect interest on the lease liability;
((b)) reducing the carrying amount to reflect the lease payments made; and
((c)) remeasuring the carrying amount to reflect any reassessment or lease modifications specified in paragraphs 39–46, or to reflect revised in-substance fixed lease payments (see paragraph B42).
 37. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
 38. After the commencement date, a lessee shall recognise in profit or loss, unless the costs are included in the carrying amount of another asset applying other applicable Standards, both: 

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Reassessment of the lease liability 
 39. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
 40. A lessee shall remeasure the lease liability by discounting the revised lease payments using a revised discount rate, if either: 

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 41. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
 42. A lessee shall remeasure the lease liability by discounting the revised lease payments, if either: 

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 43. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Lease modifications 
 44. A lessee shall account for a lease modification as a separate lease if both: 

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 45. For a lease modification that is not accounted for as a separate lease, at the effective date of the lease modification a lessee shall: 

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 46. For a lease modification that is not accounted for as a separate lease, the lessee shall account for the remeasurement of the lease liability by: 

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Presentation 
 47. A lessee shall either present in the statement of financial position, or disclose in the notes: 

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 48. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
 49. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
 50. In the statement of cash flows, a lessee shall classify: 

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Disclosure 
 51. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
 52. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
 53. A lessee shall disclose the following amounts for the reporting period: 

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 54. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
 55. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
 56. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
 57. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
 58. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
 59. In addition to the disclosures required in paragraphs 53–58, a lessee shall disclose additional qualitative and quantitative information about its leasing activities necessary to meet the disclosure objective in paragraph 51 (as described in paragraph B48). This additional information may include, but is not limited to, information that helps users of financial statements to assess: 

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 60. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
LESSOR 
Classification of leases (paragraphs B53–B58) 
 61. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
 62. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
 63. Whether a lease is a finance lease or an operating lease depends on the substance of the transaction rather than the form of the contract. Examples of situations that individually or in combination would normally lead to a lease being classified as a finance lease are: 

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 64. Indicators of situations that individually or in combination could also lead to a lease being classified as a finance lease are: 

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 65. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
 66. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Finance leases 
Recognition and measurement 
 67. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Initial measurement 
 68. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
 69. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Initial measurement of the lease payments included in the net investment in the lease 
 70. At the commencement date, the lease payments included in the measurement of the net investment in the lease comprise the following payments for the right to use the underlying asset during the lease term that are not received at the commencement date: 

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Manufacturer or dealer lessors 
 71. At the commencement date, a manufacturer or dealer lessor shall recognise the following for each of its finance leases: 

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 72. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
 73. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
 74. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Subsequent measurement 
 75. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
 76. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
 77. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
 78. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Lease modifications 
 79. A lessor shall account for a modification to a finance lease as a separate lease if both: 

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 80. For a modification to a finance lease that is not accounted for as a separate lease, a lessor shall account for the modification as follows: 

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Operating leases 
Recognition and measurement 
 81. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
 82. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
 83. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
 84. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
 85. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
 86. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Lease modifications 
 87. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Presentation 
 88. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Disclosure 
 89. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
 90. A lessor shall disclose the following amounts for the reporting period: 

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 91. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
 92. A lessor shall disclose additional qualitative and quantitative information about its leasing activities necessary to meet the disclosure objective in paragraph 89. This additional information includes, but is not limited to, information that helps users of financial statements to assess: 

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Finance leases 
 93. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
 94. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating leases 
 95. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
 96. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
 97. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SALE AND LEASEBACK TRANSACTIONS 
 98. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Assessing whether the transfer of the asset is a sale 
 99. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Transfer of the asset is a sale 
 100. If the transfer of an asset by the seller-lessee satisfies the requirements of IFRS 15 to be accounted for as a sale of the asset: 

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 101. If the fair value of the consideration for the sale of an asset does not equal the fair value of the asset, or if the payments for the lease are not at market rates, an entity shall make the following adjustments to measure the sale proceeds at fair value: 

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 102. The entity shall measure any potential adjustment required by paragraph 101 on the basis of the more readily determinable of: 

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Transfer of the asset is not a sale 
 103. If the transfer of an asset by the seller-lessee does not satisfy the requirements of IFRS 15 to be accounted for as a sale of the asset: 

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 Appendix A Defined terms 

This appendix is an integral part of the Standard.


Terms defined in other Standards and used in this Standard with the same meaning 


 Appendix B Application guidance 

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 Appendix C Effective date and transition 

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 Appendix D Amendments to other Standards 

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