Accounting for leases – application of IFRS 16

March 2019 update

Debbie Paterson

14 March 2019


International Financial Reporting Standard 16 Leases (IFRS 16) was published in January 2016. It will radically change how lessees account for leases as it removes the distinction between operating and finance leases.

IFRS 16 will be applicable by NHS bodies in 2019/20 and its application will be time consuming. 

This briefing was first published in October 2017, it was then updated in February 2018 and June 2018.  This is its fourth update. This update reflects the recently issued HM Treasury and DHSC guidance on the application of IFRS 16 to the public sector. Amendments have been made in bold, italic. 

Comments on the questions asked during the webinar on leases in November 2018 have also been included in this briefing.

The briefing sets out the practical steps NHS bodies should be taking now as well as highlighting the issues that will need to be considered when applying the standard for the first time.

This briefing sets out the basic requirements of the new accounting standard. It provides a summary of the decisions which will have to be made when applying the standard for the first time and it reflects the decisions that HM Treasury is expected to mandate. It also considers where the application of the new standard may be difficult and particular issues NHS bodies may need to consider.

This version of the briefing updates the one published in June 2018 to take account of HM Treasury and DHSC guidance on the application of IFRS 16 to the public sector and queries raised by members.

The briefing will be updated as HFMA members discuss the application of the standard and as HM Treasury and the Department of Health and Social Care issue further guidance.


Accounting for leases – application of IFRS 16

March 2019 (PDF 569KB)