If your Agreement meets the definition of a lease as defined in IFRS 16, toggle the bar to read Yes.

If your answer is No, the agreement falls outside of the scope of IFRS 16 and won't be included in your reporting. 

By default, all agreements are included in IFRS 16 reporting. If you don't want to include an agreement in your reporting for any reason, such as the contract not being material, you can exclude this agreement by toggling the bar to No.

If your Agreement falls within one of the scope exemptions, toggle the bar to Yes and select either Low Value or Short Term (<12 months) as the Exemption Reason. 
The Exemption Description text field can be used to record any explanatory notes. 

Exempt Agreements will be excluded from your IFRS reporting, but we'll still produce journals for these Agreements

Record the discount rate that's used to determine the present value of future lease payments. 

You only need to record the interest rate in the field that corresponds with your selected transition method.

Select how many renewals you're reasonably certain to exercise under this agreement as at the Commencement or Transition date of your agreement. The scale on the questionnaire is based on the number of terms/renewals you've on-boarded in your agreement. 

Your IFRS reports will only generate up to the date that corresponds with the number of renewals you've selected. If you don't make a selection here, your IFRS reports by default will generate up until the expiry of the Initial Term for this Agreement

If you've already completed a renewal event on the agreement timeline, this will be greyed out and will not be able to be selected as it is historic. You must select one of the remaining available options. 

To check the total number of available renewals you have for an agreement you can look at the Agreement Timeline or Events page.
If, after your Commencement or Transition Date there is a change to your Organisation's original assumptions about how many renewals you expect to exercise, you can update them on the Agreement Timeline using IFRS Settings Changes. Click here for information on how to do this.

Components of the Agreement

If your agreement contains a non-lease component that is normally paid for as part of the rent payment, you can choose to account for this separately by toggling this question to Yes and recording the amount to be accounted for separately.
The Amount allocated to the non lease component will not be included in the lease liability for this agreement. 

Transition Method

Select the transition method that you want to apply to your agreement.
By default the method will be selected as Org Defaults. This will apply whichever transition method you set as your default in your Organisation Accounting and Finance Settings.
If your agreement is not following the Org Default, you can select from the alternate methods of Simplified (Option B) or Modified Retrospective (Option A).

If you've adopted the Simplified transition method, If your agreement commences after your organisation transition date, you should on-board this agreement using the Modified Retrospective transition method.

Initial Measurement of Lease Liability

If you expect to pay a residual value guarantee, toggle the bar to Yes and record the amount of that guarantee.

This will be added to the Lease Liability at the present value of the payment.

If you reasonably expect to exercise a price of purchase option, toggle the bar to Yes and record the amount of the purchase option.

This value will be added to the Lease Liability at the present value of the payment.  

If known, use the calendar tool to enter in the end date of the useful life of asset if it does not align with the end of the lease term. If you're adding in a date here, you'll need to ensure you've also recorded an amount above or you'll get an error message when you try to run your reports for this agreement.

If you expect to terminate an agreement early, toggle the Include payments of penalties for terminating a lease bar to Yes.

Record the Expected Termination Date, and if applicable, record the amount of the penalty fee. The penalty fee will be added to your Lease Liability.

If you enter in an amount, you must also record an expected termination date or you'll get an error message when you try to run your reports.

Initial Measurement of Right of Use Asset

If there were any initial direct costs incurred to secure the lease, toggle the bar to Yes and record the amount of the costs.  

Initial direct costs are the incremental costs of obtaining a lease that would otherwise not have been incurred. These costs may include; commissions; legal fees and costs of negotiating lease terms and conditions (if contingent on origination of the lease) and any costs of arranging collateral.

If your transition method is full retrospective or modified retrospective and there is a provision to recognize the costs to dismantle and remove an underlying asset under IAS 37, toggle the Make Good Value to Yes and record the amount.

If you're using the simplified transition method and you have a make good value, you'll need to record this under the make good question designed for simplified transition methods. If you populate the incorrect field as against your transition method, the system will not take it into account.

Accounting Elections

Other Standards

If the Right of Use Asset is accounted for under IAS 40 toggle the bar to Yes. If so, at each applicable reporting date you will have to adhere to the valuation requirements per IAS 40 and the straight line depreciation methodology will not apply.  

Any increase or decreases in value of the Right of Use Asset will wash through the P&L.

You'll also need to enter in the fair value of the Right of Use Asset at the date of transition under the Modified Transition > Other Considerations section of the questionnaire.

If your lease is required to be fair valued on commencement, toggle the bar to Yes and record the fair value at commencement date.

If your lease was acquired as part of a business combination, toggle the question to Yes. Record the Effective date of transaction, discount rate of transaction, and any deferred gain/loss recognized on that date.

Your reporting for this agreement will only start on the effective date of this transaction.

If desired you can set up internal management of inter company leases by recording an Inter company Lessor reference and an Inter company Percentage. This will have no impact on the calculation of your Lease Liability or Right of Use Asset.

If an agreement has been assigned to your organisation i.e. the agreement has been assigned from the original lessee to your organisation (as the new lessee) and your organisation has assumed all obligations and lease payments, then toggle the bar to Yes.

Record the Assignment Date and the Discount rate on the date of assignment.

Your reporting will only start on the Assignment date.

Even though during the on-boarding of your agreement you might have entered in assignment events, these don't automatically pull through to your IFRS assumptions, so you still need to make a selection if there is an assignment.

Subleased Elements

Modified Transition

Adjustments to the ROU Asset

If you're using the simplified transition method and if this lease was acquired as part of a business combination and a lease asset or liability created on transition, toggle the bar to Yes.

Record the amount of deferred gain or loss on the balance sheet at date of transition.

If you're using simplified transition and there is a make good provision, toggle the bar to  Yes and  enter in the amount of the make good provision.  

The effect of this is that at transition, the make good provision is to be removed from its current classification on the balance sheet and reclassified to the Right of Use Asset, thus increasing its value. Liability does not change and is still accounted for under IAS 37.

Other Considerations