Accounting for leases: why it affects you

Debbie Paterson

18 November 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 2020/21. The application of the new standard cannot be managed by solely by the financial reporting experts in the finance team – it will require engagement from staff throughout the organisation as well as changes to systems and reporting arrangements.

The new requirements are complex – this briefing is intended to explain the key issues to non-finance staff to help them understand how this change in accounting practice may affect them. 

This briefing sets out what a lease is and how the accounting arrangements are changing. It identifies the potential impact on the financial position of NHS bodies as well as providing examples to allow non-finance staff to start to ask the right questions of their financial reporting colleagues.


Accounting for leases: why it affects you

November 2019 (PDF 202KB)