AASB 16 Leases 39-43: Remeasure the lease liability, adjusting the right-of-use asset, with a revised discount rate for changes in lease term or purchase option assessment, and with the unchanged rate for residual value guarantee changes and index or rate changes when the cash flows change

What does 39-43 require?

Remeasurements of the liability adjust the right-of-use asset, with any excess once the asset reaches zero going to profit or loss. The revised payments are discounted at a revised rate (the implicit rate for the remainder of the term if readily determinable, otherwise the incremental borrowing rate at the reassessment date) when the lease term changes or the assessment of a purchase option changes. The unchanged discount rate is used when the amounts expected under a residual value guarantee change or when future payments change because an index or rate changes, including a market rent review, the remeasurement being made only when the adjustment to the cash flows takes effect; a revised rate applies only where the change stems from floating interest rates.