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Technical Resources
This webpage contains pronouncements, guides and articles that are relevant
to HKFRS 16 Leases.
Effective Date
Financial periods beginning on or after 1 January 2019.
Affected standards
Supersedes HKAS 17 Leases, HK(IFRIC)-Int 4 Determining whether an Arrangement contains a Lease, HK(SIC)-Int 15 Operating Leases—Incentives and HK(SIC)-Int 27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease.
Why do we need a new standard
The previous lease accounting model required lessees and lessors to classify their leases as either finance leases or operating leases and account for those two types of leases differently. That model was criticised for failing to meet the needs of investors and analysts because it did not always provide a faithful representation of leasing transactions. In particular, it did not require lessees to recognise assets and liabilities arising from operating leases (they were "off balance sheet leases"). As a result, many investors and analysts adjusted the amounts reported in a lessee’s financial statements to reflect the assets and liabilities arising from off balance sheet leases, and make other consequential adjustments. However, because of the limited information available, the estimates made were often inaccurate. In addition, many other investors did not make adjustments. This created asymmetry and inaccuracy of information in the market.
Recent development
IFRS 16 was issued in January 2016 and became effective for annual periods beginning on or after 1 January 2019. To help the IASB assess the effects of a new Standard after it has been effective for some time, the IASB started carrying out the Post-implementation Review (PIR) of IFRS 16 in the second quarter of 2024. On 17 June 2025 the IASB published the Request for Information (RFI) PIR of IFRS 16 Leases. The RFI sought stakeholder feedback on IFRS 16, focusing on:
• Overall assessment of IFRS 16, i.e. whether the Standard is working as intended;
• Usefulness of information resulting from:
- Lessees’ application of judgement in determining lease term, discount rates and variable lease payments;
- Disclosure of information about lessee’s lease-related cash flows;
• Ongoing costs for lessees in applying the measurement requirements for discount rate, subsequent measurement and reassessment of the lease liability, and lease modifications;
• Potential improvements to future transition requirements; and
• Interactions between IFRS 16 and other IFRS Accounting Standards.
The Hong Kong Institute of Certified Public Accountants (the Institute) conducted various forms of outreach activities to solicit feedback from local stakeholders. On 13 October 2025, the Institute submitted its comment letter to the IASB.
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