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LEASES

Subsequent measurement (IFRS 16.29-38)

• A lease gives rise to a depreciation expense for the leased asset

(for example, depreciation on machinery) as well as a finance cost
for each accounting period.

• The depreciation policy for depreciable leased assets should be
consistent with that for depreciable assets which are owned, and
the depreciation recognised shall be calculated in accordance
with IAS 16, Property, Plant and Equipment, IAS 38, Intangible

Assets and IAS 40, Investment Property.

• The right-of-use asset is depreciated over its useful life if

ownership transfers at the end of the lease term. If the transfer
of ownership is not certain, the right-of-use asset shall be
depreciated over the shorter of its useful life or lease term.

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