IFRS 16 Leases CPA Financial Reporting Module 1

IFRS 16 Leases is now in CPA FR Module 1…and it’s confusing

Because the calculation of the lease liability includes PV calculations using the implicit interest rate in the lease or the lessee’s incremental borrowing rate. In addition to this you must include the exercise price of purchase options if you are reasonably certain to exercise them, and amounts expected to be payable under residual value guarantees.

Then, you also need to measure the right-of-use asset at cost and then determine its subsequent measurement which may be at cost, fair value or based on the revaluation model.

Have you had a look at the CPA Financial Reporting study guide Module 1 Example 1.6. Hmmm…

In Example 1.6 there is a detailed case study, with journals linked to this in Question 1.10, and it can be very confusing. CPA MYOL Ask the Expert forum is already bursting with questions on this topic. So we have created some resources to help you understand it better.

Still don’t quite understand IFRS 16 Leases?  Watch our free recorded IFRS 16 Leases webinar for an explanation.

What will I get out of it?

KnowledgEquity’s step by step webinar goes through CPA example 1.6 and solution. In the recording we provide,

– an explanation of PV calculations and annuity calculations
– a template to demonstrate the calculations
– the relevant IFRS 16 Lease journal entries

So don’t panic. Get clarity on this topic now and you can move ahead in your studies.

Where do I watch the webinar?

1. Enrol in our Free CPA Financial Reporting Assist course by clicking here
Already studying Financial Reporting with KnowledgEquity? You’ll find the webinar recording in Module 1 unit.

2. You’ll be sent details on how to navigate the Learning Management System (LMS).

3. Then go into the LMS Module 1 Unit Application of Measurement Principles. You’ll find the recording of the webinar.


IFRS 16 – Leases: What’s new

This short video may assist your understanding on the changes coming with the new IFRS 16.

IFRS 16 – Leases from KnowledgEquity on Vimeo.


When you’re ready, we’re ready…

We are ready at KnowledgEquity to assist you the best we can. If you think tuition support can help you get through your CPA exam then we have a solution. Enrol in any of our courses, Full Focus, Exam Ready, Revision Plus or our freemium CPA Assist (free) to get immediate access. Check out your preferred subject page using the links below.



February 14, 2018

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