IPSASB ED 64 Leases

Not-for-profit Public Sector

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IPSASB’s proposals for accounting for leases

The International Public Sector Accounting Standards Board (IPSASB) has published for comment Exposure Draft 64 Leases (ED 64).  This contains proposals for how you will account for leases and disclose them in financial statements, including leases at below market-terms (concessionary leases). 

The proposals remove the distinction between an operating lease and a finance lease.  Instead, the lessee and the lessor will apply a right-of-use model to account for leases. 

Under the proposals:

  • a lessee could recognise on their statement of financial position a liability for future lease payments and a right-of-use asset at the commencement date of the lease.

Subsequently, the liability is reduced as the lease payments are made and the right-of-use asset is amortised over the term of the lease; and  

  • a lessor could recognise on their statement of financial position an asset (for the lease payments due over the period of the lease) and a liability (for unearned revenue) at the commencement date of the lease. 

The asset is reduced as the lease payments are received and revenue (reduction in the liability) is recognised over the term of the lease.

The proposed lessee accounting is the same as the for-profit equivalent standard, IFRS 16 Leases, issued by the International Accounting Standards Board (IASB). 

However, the proposed lessor accounting is not the same as IFRS 16, which retains the distinction between a finance lease and an operating lease that is currently found in IAS 17 Leases and IPSAS 13 Leases for lessor accounting.

Accessing the Consultation Documents


Commenting on the proposal

If your entity is a public sector or not-for-profit entity applying PBE Standards, this is your opportunity to provide comment on and influence the development of an IPSASB standard based on ED 64.  

If you are aware of New Zealand-specific matters you want the NZASB to consider, send your comments—both formal or informal—by 31 May 2018 to the NZASB as follows:

Either by post to the:

Chief Executive
External Reporting Board
PO Box 11250
Manners Street Central
WELLINGTON 6142

OR by email to submissions@xrb.govt.nz.

We also encourage you to send comments directly to the IPSASB by 30 June 2018, with a copy to the NZASB. These can either be the same as or independent of your comments sent to the NZASB. Your comments can be made electronically to the IPSASB website (www.ifac.org) using the “Submit a Comment” link.  First-time users must register with IFAC to submit electronically.


Please also note:

    • We would appreciate receiving a copy of your comments in electronic form (preferably Microsoft Word format).  This helps us more efficiently collate and analyse comments. Please also specify the exposure draft number and title in your electronic file. 
    • Tell us on whose behalf you are making the comments (for example on behalf a group or an entity).
    • We intend publishing all comments on the XRB website, unless they may be defamatory. If you have any objection to this, we will not publish them. However, they will remain subject to the Official Information Act 1982 and, therefore, may be released in part or in full. The Privacy Act 1993 also applies.
    • If you have an objection to the release of any information contained in your comments, we would appreciate you identifying the parts of your comments to be withheld, and the grounds under the Official Information Act 1982 for doing so (e.g. that it would be likely to unfairly prejudice the commercial position of the person providing the information).