EFRAG Online survey on the effects of IFRS 16

Background of IFRS 16 and the IASB´s PIR project

IFRS 16 Leases was issued by the IASB on 13 January 2016 and had a mandatory effective date of 1 January 2019. IFRS 16 replaced IAS 17 Leases, IFRIC 4 Determining whether an Arrangement contains a Lease, SIC‑15 Operating Leases – Incentives and SIC‑27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease. IFRS 16 sets out the principles for the recognition, measurement, presentation and disclosure of leases.

Over the following years, the IASB issued some amendments to IFRS 16, including those related to Covid 19 related rent concession (in May 2020) and to the accounting for lease liability in a sale and leaseback transaction when the payments include variable payments (in September 2023).

In December 2023 the IASB decided to start the post-implementation review (PIR) of IFRS 16 in Q2 2024. The IASB’s decision was based on guidance from the Due Process Handbook and the discussion on the clarifications of the objective, process and outcome of a PIR.

During the PIR, the IASB will assess the effects of IFRS 16 on users, preparers, auditors and other stakeholders. The PIR has two phases:

Phase 1: where the IASB identifies matters to be examined (request for information), and
Phase 2: where the IASB considers the information gathered from the public consultation and publishes a report and feedback statement, including a summary of the findings and next steps (e.g., a standard-setting project, an agenda decision, educational materials or no further action).

The objective of a PIR is to assess whether the effects of applying the new requirements on users of financial statements, preparers, auditors and regulators are as intended when the IASB developed those new requirements. A PIR is not a standard-setting project and does not automatically lead to standard-setting. It is not intended to address every application question, either.

EFRAG’s preparatory work to respond to the IASB

EFRAG is undertaking its preparatory work in anticipation of the IASB IFRS 16 PIR request for information (RFI). To that extent, and in order to develop a preliminary list of application issues arising from applying IFRS 16, EFRAG is planning to:

have meetings with different constituents (preparers, users, auditors, national standard-setters and academics);
review the existing literature and other publications, including previous discussions at the IFRS IC and ESMA’s enforcement decisions; and
launch online questionnaires addressed to preparers, auditors, national standard-setters and users.

Purpose and content of this survey

Objective of this survey

The objective of this survey is to help the EFRAG Secretariat to better understand whether IFRS 16 works overall as intended. In particular, the purpose of this survey is to collect your input about issues you may have encountered arising from the application of IFRS 16 including its interaction with other IFRS Accounting Standards, whether they are common and widespread, and how the IASB should address them in the context of a PIR.

This survey is aimed at preparers of financial statements, auditors, national standard-setters and regulators. EFRAG will publish a users' survey separately.

Structure

The survey consists of 20 questions sorted into the following sections:

Section 0 – General Information – (Question 1)
Section 1 – Overall assessment of and experience with IFRS 16 – (Questions 2-7)
Section 2 – Application issues arising from the application of IFRS 16 – (Question 8)
Section 3 – Application issues arising from the interaction between IFRS 16 and other IFRS Accounting Standards and Interpretations – (Question 9)
Section 4 – IFRS presentation and disclosure requirements, including cost-benefit analysis – (Questions 10-14)
Section 5 – Lessor accounting – (Question 15)
Section 6 – Transition requirements – (Questions 16-18)
Section 7 – Other information – (Questions 19-20)

Please find an overview of this survey in PDF format here.

Deadline and relevant information

Please submit your answers by 22 April 2024 by clicking on the “Submit” button at the end of the survey.

Please note that you can save the draft questionnaire and go back to it at a later time by clicking on the button “Save and continue later” in the right top corner of the page. EFRAG will only consider completed surveys.

The collected information will remain confidential and, when used in any reports, it will be presented in such a way that no individual company or person can be identified.

Thank you for completing this survey!