If you have a Tier 1 or 2 For Profit entity and haven't already determined how NZ IFRS 16 Leases will impact on your entity's financial statements, now is the time to do so.

The adoption of NZ IFRS 16 requires recognition of lease liabilities and 'right-of-use' assets for all leases for which entities are the lessee with exemptions available for short-term leases and leases of 'low-value' assets (considered to be those less than $USD5k).

The recognition and measurement requirements of NZ IFRS 16 are extensive and should not be underestimated. The good news is that we have set up a specific team to assist entities to transition to the new standard and meet the ongoing obligations in relation to lease reporting.

Specific services we provide include:


We can help you understand and operationalise the key requirements of NZ IFRS 16 including:

  • Capturing the key lease information from each lease agreement
  • Assessing the lease term for each lease (i.e. considering the likelihood of lease extensions)
  • Explaining the key disclosure requirements and the practical expedients available
  • Outlining the different transition options


We can calculate the 'right- of-use' (ROU) asset, lease liability, interest and depreciation charges for each lease using our bespoke IFRS 16 calculator.


We can prepare and/or review the financial statement disclosures required by NZ IFRS 16, including explaining the key movements between the operating lease commitments prior to transition and the opening lease liability.

Incremental borrowing rate determination

Determining the interest rate implicit in the lease or the appropriate incremental borrowing rate can be complex and can also have a significant impact on the corresponding lease liability, ROU asset and lease expenses. We can assist in determining the appropriate incremental borrowing rate to use. NZ IFRS 16 requires this to be assessed on a lease-by-lease basis although certain exemptions are available.

Impact assessments 

We can advise you on the potential impact of 'lease vs buy' financing decisions and other considerations that now arise as a result of these new leases appearing on your balance sheet.

Journal entries

Everyone's favourite! Unless you are an audit client, we can provide you with a summary of the journal entries you will need to enter into your accounting system.

Ongoing compliance 

As lease conditions change and you enter into new leases, we can provide you with updated ROU asset and lease liability calculations and the corresponding journal entries. NZ IFRS 16 differentiates lease changes between modifications and remeasurements with differing requirements for each. We can help you navigate what this means for your business. Many businesses have received rent abatements and lease concessions as a result of COVID-19 and we can assist in correctly accounting for these.

Auditor liaison 

We can engage with your auditors and handle any queries they may have.


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