Insights into IFRS 16: Lease incentives

Lease incentives may take various forms depending on the negotiation between the lessee and the lessor.When accounting for lease incentives in accordance with IFRS 16 ‘Leases’ from a lessee perspective, questions may arise in how to identify a lease incentive and when the accounting treatment changes depending on how the lease incentive is granted. This publication aims to resolve these lessee accounting questions.

When accounting for lease incentives in accordance with IFRS 16 ‘Leases’ from a lessee perspective, questions may arise in how to identify a lease incentive and when the accounting treatment changes depending on how the lease incentive is granted. This publication aims to resolve these lessee accounting questions.

IFRS 16 defines lease incentives as:

Lease incentives definition:

Payments made by a lessor to a lessee associated with a lease, or the reimbursement or assumption by a lessor of costs of a lessee (IFRS 16. Appendix A)

Download Insights into IFRS 16: Lease incentives

Granting lease incentives is a common way to encourage a new lessee to sign up to a new lease contract and fill vacant premises.

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