The International Accounting Standards Board (IASB) has published a proposal to amend IFRS 16 Leases by specifying how a company measures the lease liability in a sale and leaseback transaction (refers to transactions for which a company sells an asset and leases that same asset back from the new owner).
The proposed amendment would not change the accounting for leases other than those arising in a sale and leaseback transaction. It is expected to improve the sale and leaseback requirements already in IFRS 16 by providing greater clarity for the company selling and leasing back an asset both at the date of transaction and subsequently. The proposal would help ensure consistent application of the Standard.
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Invitation to comment
The Exposure Draft is open for comment until 26 February 2021.
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