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IFRS® Accounting Standards

Lease Liability in a Sale and Leaseback

Summary

The Accounting Standards Board (AcSB) is participating in the International Accounting Standards Board’s (IASB) project to amend IFRS 16 Leases.

The objective of this project is to specify how a seller-lessee should apply the subsequent measurement requirements in IFRS 16 to the lease liability that arises in a sale and leaseback transaction.

The AcSB’s due process includes ensuring that Canadian entities’ financial reporting needs are considered by the IASB and issuing the AcSB’s own exposure draft on each IASB proposal. Subject to the responses to the AcSB’s exposure draft on whether the IASB’s proposals are appropriate for application in Canada, the AcSB expects that the amendments will be incorporated into Canadian GAAP in accordance with the AcSB’s strategy of adopting IFRS Standards for publicly accountable enterprises.

Refer to the IASB Lease Liability in a Sale and Leaseback project page for more information. 

 

Staff Contact(s)

Grace Flis, CPA, CA Principal, Accounting Standards Board

Project Status

  • Information gathering

    Completed in April 2020

  • Approving project

    The IASB added the project to its agenda in 2020

  • Engaging Communities

    The IASB issued its Exposure Draft in November 2020

    The AcSB issued its Exposure Draft in December 2020

  • Deliberating feedback

    The AcSB submitted its response letter to the IASB in March 2021

    The IASB is has deliberated comments on their Exposure Draft

  • Final pronouncement

    The IASB issued the final amendments in September 2022

    The AcSB will ballot the final amendments and complete its endorsement process to incorporate the amendments into Canadian GAAP in Q4 2022

News


October 4, 2022

News, International Activity

Update – IASB issues narrow-scope amendments to IFRS 16

The IASB issued narrow-scope amendments to add subsequent measurement requirements to IFRS 16 Leases. The amendments explain how a company accounts for a sale and leaseback after the date of the transaction. The AcSB will ballot the final amendments and complete its endorsement process in Q4 2022. 

April 12, 2021

News

AcSB Response – Lease Liability in a Sale and Leaseback

On March 26, 2021, the AcSB responded to the IASB’s Exposure Draft, issued in November 2020. The IASB’s proposals take a step forward towards ensuring that users are provided with information that better reflects the economics of a sale and leaseback transaction. The AcSB’s letter encourages the IASB to reconsider areas where complexity is introduced and there is a departure from the current accounting requirements for lease transactions other than sale and leaseback transactions. Read our letter to find out more!

December 9, 2020

Document for Comment

AcSB Exposure Draft – Lease Liability in a Sale and Leaseback

The AcSB has issued its Exposure Draft that corresponds to the IASB’s Exposure Draft on this topic. Stakeholders are encouraged to submit their comments by March 29, 2021.

December 8, 2020

International Activity

IASB Exposure Draft – Lease Liability in a Sale and Leaseback

Thinking about entering into a sale and leaseback transaction? Then this exposure draft could be important to you! The IASB has issued an Exposure Draft to amend IFRS 16 to specify the method a seller-lessee uses in initially measuring the right-of-use asset and liability in a sale and leaseback transaction. Canadian stakeholders are encouraged to submit their comments to the IASB by March 29, 2021.

Disclaimer

This project summary has been prepared for information purposes only. Decisions reported are tentative and reflect only the current status of discussions on this project, which may change after further Board deliberations. Decisions to publish Handbook material are final only after a formal voting process.