Case study: Lease by lease - discover the IFRS 16 disclosures

New accounting standard IFRS 16 on leases is effective starting from 1 January 2019. 

Although the new standard was published in 2016, its implementation is difficult for many entities. The application of new guidelines is a challenge for the entire organization, as it requires appropriate changes both in the processes related to accounting and in operational departments.

The new model requires the lessee to recognise almost all lease contracts on the balance sheet. For lessees that have entered into contracts classified as operating leases under IAS17, this could have a significant impact on the financial statements.

This case study publication aims to concentrate on the disclosure aspect of the new standard for the lessee. In this case study we describe how to apply IFRS 16, i.e. disclosure required in financial statement in the year of the first adoption of IFRS 16 and the disclosures that need to be provided on an ongoing basis.

We have deliberately selected a Company with relatively simple operations. The extract from the directors’ report is followed by IAS17 disclosures. In the final part of this section, we have summarised the impact of IFRS16. 

Incidental subleases are also presented to indicate that the new lease model for lessee may impact also accounting for subleases, nevertheless this publication is not designed for lessors.

We have deliberately selected a company with a relatively simple business model – a manufacturer of furniture and equipment sold through its own retail chain. We have provided the company’s background, followed by IAS17 disclosures and then presented extracts from the 2019 financial statements that incorporate the requirements of IFRS16. This is an example of the impact and disclosures of IFRS16 and, therefore, should not be perceived as being a comprehensive source of knowledge on IFRS16 or disclosure requirements. We hope you will find this case study useful and it will help you better understand the difference between the old and new disclosure requirements.

Tomasz Konieczny, Partner PwC


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Tomasz Konieczny

Partner, PwC Poland

Tel: +48 22 746 4285

Marta Madejska

Director, PwC Poland

Tel: +48 22 746 4139

Anna Wójtowicz

Dyrektor, PwC Poland

Tel: +48 519 504 447

Marta Stypułkowska-Molga

Senior manager

Tel: +48 502 184 074

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