IFRS 16 Post-implementation Review

Project status: Active
Current project stage: Exposure draft consultation
Project responsible: Kathrin Schoene, Juan Jose Gomez de la Calzada, Aleksandra Sivash

Description

In December 2023 the IASB decided to start the post-implementation review ("PIR") of IFRS 16 Leases in Q2 2024.

Such PIR provides a planned opportunity to assess questions about the new requirements, compared to other mechanisms which may identify questions on an ad hoc basis at any time. It provides an opportunity to consider the new requirements in their entirety and focuses on whether the new requirements are working as intended.

During the PIR, the IASB will assess the effect of IFRS 16 on users, preparers, auditors and regulators. More specifically, the IASB will assess whether:

the objectives of the standard-setting project have been met;
information provided by IFRS 16 is useful to users of financial statements;
the costs arising from IFRS 16 are broadly as expected by the IASB when it developed the Standard; and
the requirements are capable of being applied consistently.

These assessments will help the IASB determine what action, if any, it might take relating to IFRS 16. Possible actions include a standard-setting project, an agenda decision or education materials.

The PIR is not intended to open redeliberation on points of disagreement on the Standard, unless there are new elements to consider - nor is it intended to lead to the resolution of every application question.

Each PIR has two phases where the IASB:

Phase 1: identifies matters to be examined (request for information);
Phase 2: considers the information gathered from the public consultation and publishes a report and feedback statement, including a summary of the finding and outline of next steps.

The request for information (‘RFI’) is expected to be published by the IASB in the beginning of 2025.

Consult the IASB project page here for further information.

EFRAG preparatory work

In January 2024 EFRAG started its preparatory work in anticipation of the IASB IFRS 16 PIR RFI. To that extent, and to develop a preliminary list of application issues arising from applying IFRS 16, EFRAG has:

organised meetings with different constituents (preparers, users, auditors, national standard setters, and academics);
reviewed the existing literature and other publications, including previous discussions at IFRS IC (Interpretations Committee), ESMA’s enforcement decisions and academic studies;
launched online surveys to be addressed to preparers, auditors, national standard setters, regulators and users; and
interacted closely with European national standard setters to identify issues in the implementation of IFRS 16 arising in their jurisdiction.

The summary of responses from of the above mentioned online surveys can be consulted at the following links:

EFRAG Preparers' Survey on IFRS 16 Leases here
EFRAG Users' Survey on IFRS 16 Leases here

Furthermore, the preliminary result of the outreach was discussed in public meetings in May 2024 (here) and September 2024 (here).

Draft Comment Letter

On 28 July 2025, EFRAG published its Draft Comment Letter ('DCL') on the IASB's Request for Information ('RFI') IASB/RFI/2025/1 Post-implementation Review ('PIR') of IFRS 16 Leases (‘IFRS 16’ or ‘the Standard’). Comments on EFRAG’s DCL are requested by 30 September 2025.

In the DCL response, EFRAG notes that the Standard is generally working well – especially for straightforward lease agreements - and has largely met its objective of improving lease-related financial reporting. Users appreciated the increased transparency and comparability brought about by the requirement for lessees to recognise most leases on the balance sheet. While preparers faced significant implementation costs - and ongoing costs remain high, particularly for lease-intensive industries - they also reported benefits including improvements in internal controls, lease monitoring, and data quality.

However, there are some potential areas for targeted improvements of the Standard. EFRAG raises conceptual issues regarding the presentation and disclosure of cash flow information.

EFRAG also highlights application issues regarding whether some contracts fall within the scope of IFRS 16, particularly in relation to certain intangible assets such as software licences and cloud computing services, as well as the complexity of distinguishing between a lease and an in-substance purchase.

Lastly, EFRAG raises issues related to the interactions between IFRS 16 and other IFRS accounting standards, specifically for distinguishing between lease modifications under IFRS 16 and lease liability extinguishments under IFRS 9 Financial Instruments and in relation to the interaction with IFRS 15 Revenue from Contracts with Customers on sales and leaseback transactions.

Documents

No project documents.

Project news

12/04/2024 - Just 10 days to go – EFRAG surveys on the Post-Implementation Review of IFRS 16 Leases

Just 10 days are left to submit your views on the Post-Implementation Review of IFRS 16 Leases. The deadline is 22 April 2024.
For more information and to complete the survey, visit the following links:
- Survey for preparers, auditors, regulators and national standard setters: [Link] [PDF]
- Survey for users of financial statements: [Link] [PDF]
26/03/2024 - Extension of deadline for EFRAG surveys on the Post-Implementation Review of IFRS 16 Leases
In February 2024, EFRAG launched two online surveys to gather input from diverse stakeholder groups on the effects of the implementation of IFRS 16. EFRAG is extending the deadline for responses to 22 April 2024.
To learn more about the purpose and content of the surveys, check out our video with Jens Berger (EFRAG FR TEG Vice Chair) and Kathrin Schöne (EFRAG Project Director).
- Survey for preparers, auditors, regulators and national standard setters: [Link] [PDF]
- Survey for users of financial statements: [Link] [PDF]
20/02/2024 - EFRAG survey seeks input from users on the effects of the implementation of IFRS 16 Leases – Has the reporting for leasing activities been improved?

As part of its outreach on the Post-implementation Review of IFRS 16 Leases, EFRAG invites users of financial statements to provide their views on the usefulness of information as a result of the implementation of IFRS 16, by filling in the EFRAG survey. The survey feedback will complement the feedback received from preparers, auditors, regulators, and national standard setters.
Participants can access the survey contents as a PDF here and complete the survey here until 15 April 2024.

13/02/2024 - Any issue with IFRS 16 Leases? Please express your views by filling in the EFRAG survey on Post-Implementation Review of IFRS 16

EFRAG is launching a survey to seek input from preparers, auditors, regulators, and national standard setters in preparation for the IASB request for information related to the post-implementation review of IFRS 16 Leases. EFRAG will publish a user survey separately, around 21 February 2024.

Participants can access the survey contents as a PDF here and complete the survey here until 15 April 2024.