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What is the simplified transition method under IFRS 16
What is the simplified transition method under IFRS 16

One of the transition methods available when adopting IFRS 16

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Written by Support
Updated over a week ago

Adopting this method is the easiest way to get ahead of IFRS 16. As per the above diagram, you calculate the ROU Asset from the transition date. 

What does this mean? You only need prospective lease information from the date of transition, so no digging through files to find modifications of a lease that commenced 20 years ago! The lease liability is also only calculated from the transition date.

From an IFRS 16 compliance perspective and to keep your auditors happy, if you've adopted a Full Retrospective methodology, the Simplified option is not available.

However, if you've adopted a modified retrospective, you can select either option on agreement by agreement basis. 

For more information, refer to our IFRS 16 guide here.  


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