Right-of-use asset
An asset that represents a lessee’s right to use an underlying asset for the lease term. (IFRS 16 Appendix A)
Interest rate implicit in the lease
The rate of interest that causes the present value of (a) the lease payments and (b) the unguaranteed residual value to equal the sum of (i) the fair value of the underlying asset and (ii) any initial direct costs of the lessor. (IFRS 16 Appendix A)
Lessee’s incremental borrowing rate
The rate of interest that a lessee would have to pay to borrow over a similar term, and with a similar security, the fund necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment. (IFRS 16 Appendix A)
Property, plant and equipment ifrs 16
Tangible assets held for use in the production or supply of goods and services, which are expected to be used for more than one period.
Asset
A present economic resource controlled by the entity as a result of past events
Fair value
The price that would be recieved to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date
Depreciation
Depreciation is the systematic allocation of the depreciable amount of an asset over it’s useful life
Carrying amount
The amount at which an asset is recognised after deducting any accumulated depreciation or amortisation and accumulated impairment losses.
Recoverable amount
The higher of fair value less costs to sell, and value in use
Fair value less costs to sell
Amount obtainable from the sale of an asset at arms length between knowledgeable, willing parties, less costs of disposal
Value in use
Present value of future cash flows expected to be obtained from an asset as a result of continuing to use it normally in the business
