Which statement is not part of the lessee's accounting under IFRS 16?

Which statement is not part of the lessee's accounting under IFRS 16?

• A. Recognising a right-of-use asset
• B. Recognising a lease liability
• C. Recognising depreciation on the lessee's own asset
• D. Paying lease payments that reduce the liability

Answer: (C)

Under IFRS 16, a lessee records a right-of-use asset and a lease liability at the start of the lease. Over time, the lessee depreciates the right-of-use asset and recognises interest on the lease liability, while lease payments reduce the liability. The statement about depreciation on the lessee’s own asset isn’t part of IFRS 16 accounting because the lessee does not depreciate the asset it is leasing; it depreciates the right-of-use asset instead. The other elements—recognising the right-of-use asset, recognising the lease liability, and making payments that reduce the liability—are exactly what the lessee records under IFRS 16.

Under IFRS 16, a lessee records a right-of-use asset and a lease liability at the start of the lease. Over time, the lessee depreciates the right-of-use asset and recognises interest on the lease liability, while lease payments reduce the liability. The statement about depreciation on the lessee’s own asset isn’t part of IFRS 16 accounting because the lessee does not depreciate the asset it is leasing; it depreciates the right-of-use asset instead. The other elements—recognising the right-of-use asset, recognising the lease liability, and making payments that reduce the liability—are exactly what the lessee records under IFRS 16.