Financial accounting updates — International Financial Reporting Standard 16 Leases implementation


Guidance on International Financial Reporting Standard (IFRS) 16 on Leases for NHS providers and commissioners.

Update 20 March 2020: In light of COVID-19 pressures, HM Treasury and the Financial Reporting Advisory Board (FRAB) have decided that IFRS 16 implementation in the public sector will be deferred for a further year, to 2021/22. The documents and guidance on this webpage will be updated in due course.

This page supplements the main Financial Accounting and Reporting Updates webpage for providers with information specifically on IFRS 16. Please refer to the main page for details of the latest updates.

Our guidance - not updated for deferral to 2021/22

IFRS 16 impact assessment feedback - issued 25 February 2020

This document covers common issues in the January 2020 IFRS 16 return and worked examples for how various lease scenarios should be captured in the IFRS 16 parts of the planning form.

IFRS 16 implementation guide

Our IFRS 16 implementation guide pulls together various sources of guidance and includes a timetable with milestones for IFRS 16 implementation. It also provides further details of individual tasks and national exercises that will support implementation of the Standard.

IFRS 16 Implementation guide PDF, 227.2 KB

Last updated Friday 13 December 2019

IFRS 16 frequently asked questions

This frequently asked questions (FAQ) document provides guidance on technical aspects of implementing IFRS 16 and will be updated over the coming year.

IFRS 16 FAQs - updated 28 January 2020 PDF, 228.7 KB

Last updated 28 January 2020

IFRS 16 2020/21 impact forecast

Our IFRS 16 implementation guide gives more details of the 2020/21 impact forecast due for submission on Wednesday 15 January 2020.

Guidance on how to complete the return for providers is available on the main Financial Accounting webpage: Financial accounting and reporting updates. For commissioners and other NHS England entities, guidance will be added to SharePoint in w/c Monday 16 December 2019.

Supporting tools from the Department of Health and Social Care (DHSC)

If you have any questions on the following DHSC tools please contact the Department's accounting policy and guidance team on

DHSC IFRS 16 implementation training presentation

This powerpoint presentation from DHSC is a training tool that explains principles of the IFRS 16 and how accounting for leases changes under the new standard. It has been developed with finance and operational/commercial users in mind, to help colleagues assess the impact of IFRS 16 on accounting, budgeting and operations.

DHSC example lease register

This example lease register from DHSC is for recording of leases from the perspective of a lessee. This example register may be useful to entities that are considering what level of data is required to be collected to inform the accounting and budgeting entries for each lease, or have not yet developed a lease register or finalised a systems approach. It is shared for information purposes and does not form part of a mandatory data collection requirement.

DHSC lease accounting tool

This lease accounting tool is a spreadsheet solution developed by DHSC which helps to calculate and summarise liability and asset values under IFRS 16 for each lease entered in the tool. It is optional for use.

DHSC worked example spreadsheets

DHSC has developed a series of worked examples that illustrate the calculation of lease accounting entries and the impact on accounts in each scenario.

Worked examples: simplified scenarios

Scenario one — operating lease

Scenario two — finance lease

Worked examples: more complex examples

Scenario three — operating lease (including upfront payments, initial direct costs and lease incentives)

Scenario four — finance lease (including different discount rates used by the lessee and the lessor)

Scenario five — early termination of the lease

Scenario six — sublease arrangement

Scenario seven — cumulative catch up - operating lease on transition to IFRS 16

Scenario eight — sale and leaseback arrangement

Scenario nine — revaluation of the right of use asset

Scenario 10 - reassessment of the lease liability (with no change in discount rate)

Scenario 11 - reassessment of the lease liability (with change in the discount rate)

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