Use of interest rate implicit in the lease and incremental borrowing rate

This is the first episode of five EY IFRS podcasts on the determination of discount rates by lessees, when applying the new leases standard of IFRS 16 Leases. This set of five EY IFRS podcasts on the determination of discount rates by lessees, when applying the new leases standard of IFRS 16 Leases is presented by Victor Chan and Luci Wright from EY’s Global IFRS team.

Related topics

This episode covers how a lessee is required to evaluate the discount rate to be applied to lease payments in a contract. We discuss whether a lessee should use the interest rate implicit in the lease or the incremental borrowing rate as defined in IFRS 16.

Learning outcomes 

  • To apply IFRS 16, entities must determine the discount rate that is applied to the lease payments.

For your convenience, full text transcript of this podcast is also available. 


Presenters


Luci Wright

Executive Director, Global IFRS

Victor Chan

International Director in Global IFRS

Podcast

Episode 01

Duration