[Verse 1] When you sign that lease agreement, IFRS sixteen comes alive Right-of-use asset on your books, lease liability by your side Day one recognition's crucial, capture what you have to pay Present value of the payments, discount rate shows you the way [Chorus] ROU asset, lease liability Discount rate, what's the key? Short-term out, low-value free IFRS sixteen, follow me Modify the lease today Remeasure what you have to pay [Verse 2] Incremental borrowing rate when lessor's rate is not known Secured lending at similar terms, make that discount rate your own Lease payments include the fixed, variable tied to index too Options reasonably certain, penalties coming due [Chorus] ROU asset, lease liability Discount rate, what's the key? Short-term out, low-value free IFRS sixteen, follow me Modify the lease today Remeasure what you have to pay [Verse 3] Right-of-use asset starts with liability, prepaid rent and costs Initial direct expenses added, nothing here gets lost Depreciate it straight-line method, or another systematic way Interest on the lease liability, unwinding every day [Bridge] Twelve months or less you can elect out Short-term leases, take that route Five thousand dollars, low-value choice Straight to expense, rejoice your voice But if you modify the contract terms New assessment, the standard confirms [Verse 4] Lease modifications change the scope, or consideration too Separate lease or modify? Let the standard guide you through If it's separate, new lease treatment, fresh assessment from day one If not, remeasure liability, adjustment's not yet done [Chorus] ROU asset, lease liability Discount rate, what's the key? Short-term out, low-value free IFRS sixteen, follow me Modify the lease today Remeasure what you have to pay [Outro] From operating to finance, the old days are gone IFRS sixteen's here to stay, keep the standard strong Balance sheet transparency, that's the goal we seek Right-of-use assets and liabilities, every single week
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