AASB 1 First-time Adoption of Australian Accounting Standards D9-D9E: Leases: decide whether a pre-transition contract contains a lease on the facts at the transition date; a lessee may measure each lease liability at the present value of remaining payments at its incremental borrowing rate and the right-of-use asset either as if AASB 16 had always applied or equal to the liability, using the listed practical expedients

What does D9-D9E require?

Whether a contract in place at the transition date contains a lease is assessed on the facts and circumstances at that date. A lessee may measure every lease liability at the transition date by discounting the payments still due at its incremental borrowing rate at that date, and measure each right-of-use asset either at the amount that would have applied had AASB 16 been applied since commencement using that rate, or at an amount equal to the liability adjusted for prepaid or accrued payments; right-of-use assets are then tested for impairment under AASB 136 at the transition date. Practical expedients available lease by lease are a single discount rate for similar leases, exclusion of leases ending within twelve months or of low-value assets, exclusion of initial direct costs, and hindsight on lease term for extension or termination options; a not-for-profit lessee may instead measure below-market right-of-use assets under the Australian deemed cost relief. Lease terms defined in AASB 16 keep their meaning here.