ICAI Seeks Comments on IFRS 16 Post-Implementation Review

The Institute of Chartered Accountants of India (ICAI) has issued an announcement inviting comments on the International Accounting Standards Board’s (IASB) recently released Request for Information (RFI) as part of its post-implementation review (PIR) of IFRS 16, Leases. This review, launched in June 2025, seeks to assess whether the standard is achieving its intended objectives and whether the benefits of applying it outweigh the associated costs.

IFRS 16, which became effective on 1 January 2019, brought a significant change in lease accounting by requiring lessees to recognise most leases on the balance sheet, thereby improving transparency about a company’s financial leverage and capital employed. The standard replaced IAS 17 and related interpretations, and introduced a single lessee accounting model. Under this model, lessees must recognise right-of-use assets and lease liabilities for nearly all lease contracts, enhancing comparability between entities that lease and those that buy assets.

The RFI, outlines six key areas where the IASB seeks stakeholder input:

1. Overall assessment of IFRS 16 – Whether the standard is working as intended in terms of improving the quality and comparability of financial reporting.
2. Usefulness of information requiring lessee judgment – Concerns around judgment-intensive areas like determining lease terms, discount rates, and variable lease payments.
3. Lease-related cash flows – Evaluation of how well lease-related cash flows are presented and disclosed, including their alignment with users’ needs.
4. Ongoing measurement costs – Whether the recurring costs of compliance, such as remeasuring lease liabilities and reassessing discount rates, are reasonable.
5. Transition challenges – Review of initial implementation options and their effect on comparability and reporting complexity.
6. Interaction with other IFRS Standards – Specific focus on IFRS 9, Financial Instruments, and IFRS 15, Revenue from Contracts with Customers, especially in complex scenarios like sale and leaseback transactions and rent concessions.

The ICAI has urged Indian stakeholders, including preparers of financial statements, auditors, analysts, and regulators, to review the RFI and provide their comments by 31August 2025. This feedback will help the IASB determine whether any clarifications, amendments, or additional guidance are needed to enhance the effectiveness of IFRS 16.

By issuing this invitation, the ICAI reinforces its role in promoting convergence with international best practices and ensuring that Indian perspectives are actively represented in global standard-setting deliberations. Stakeholders can access the full RFI document on the IASB’s website and submit comments either directly to the IASB or through ICAI’s portal.

Click here to read the ICAI Announcement

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