22/04/2026
One of the most common mistakes we see in IFRS 16 / AASB 16 reporting is inaccurately determining the lease term.
Renewal, termination, and purchase options are often treated as future problems. However under the standard they need to be assessed up front. If there’s an economic incentive to renew, that option may need to be included in the lease term well before the renewal actually happens.
These assumptions can feel minor, but they directly affect lease liabilities, right‑of‑use assets, and ongoing reporting.
It’s a good reminder that IFRS 16 compliance isn’t just about calculations, it starts with getting the underlying assumptions right and keeping them consistent over time.