Dear respondent,

The International Accounting Standards Board (IASB) has started its Post-implementation Review (PIR) of IFRS 16 Leases. The IASB expects to issue a Request for Information (RFI) for the PIR at the end of June 2025.

The information collected from this survey will help inform the response of the UK Endorsement Board (UKEB)* to the RFI. Your response will make a valuable contribution to the UKEB’s understanding of preparers’ views on the application of IFRS 16, particularly the ongoing costs and benefits.

How long will it take?

Depending on the level of familiarity with IFRS 16, the survey should take approximately 10 minutes to complete.

Deadline for completing the survey

The deadline for completing the survey is 30 May 2025.

Who should respond to this survey?
Organisations that:

·       prepare financial statements using IFRS Accounting Standards;

·       are listed and/or incorporated in the UK; and

·       are lessees in lease contracts.
Familiarity with the types and levels of costs of applying IFRS 16 is necessary to complete this survey.

Background

IFRS 16 provides a single lessee accounting model, requiring lessees to recognise assets and liabilities for all leases unless the lease term is 12 months or less or the underlying asset has a low value.

IFRS 16 was issued in January 2016 and applies to annual reporting periods beginning on, or after, 1 January 2019.

When the IASB issues a new Standard, it also publishes an Effects Analysis looking at the likely benefits and costs (both the one-off implementation costs and ongoing application costs) arising from the new requirements.  In general, the main benefits expected to arise from IFRS accounting standards are financial reporting transparency, comparability, and global consistency. The benefits also include enhancing investor confidence, facilitating global investment, and streamlining financial reporting processes.

The objective of a PIR is to assess whether the effects of applying the new requirements for users of financial statements, preparers, auditors and regulators are as assessed when the IASB developed those new requirements.

In its preparatory work for issuing the RFI, the IASB received feedback specifically relating to the high ongoing costs of applying IFRS 16. The UKEB Secretariat heard similar views from some preparers in the UK. The IASB tentatively decided to include a question relating to the ongoing costs focusing on the nature and causes of these costs. The question will also ask what mitigations could be put in place to address concerns about high ongoing costs.

*The UK Endorsement Board (UKEB) is the UK standard setter for IFRS Accounting Standards. As part of its role, the UKEB endorses and adopts new or amended international accounting standards for use in the UK.