Impairment considerations for the new leasing standard (IFRS 16)

Local contact

EY Global IFRS

Right-of-use assets recorded under IFRS 16 Leases will be subject to the impairment requirements of IAS 36 Impairment of Assets.

This publication discusses how right-of-use assets impact the impairment tests in lessee’s financial statements, and it is intended to help entities consider the effects of adopting IFRS 16 Leases. In particular, this publication focuses on the discount rate applied in a value-in-use model and analyzes whether the discount rate would change after the implementation of IFRS 16. Preparers and users of financial statements are encouraged to read this publication carefully and consider the potential effects of the new standard on their impairment testing.