IASB's IFRS 16 Review: What's Changing in 2026
IFRS 16 has been in force for lessees since 2019, which means it just had its first proper report card. The IASB spent the back half of 2025 and the first half of 2026 asking companies, investors, auditors and regulators the same blunt question: is this standard actually doing what it was built to do?
The short answer, based on the feedback gathered so far, is mostly yes. But the review has also surfaced a handful of sore points — and in June 2026 the Board made its first tentative decisions about where to spend limited standard-setting time next. Here's what's confirmed, what's still just a proposal, and what finance teams should actually be watching.
A decade-late report card
Back in 2016, when IFRS 16 was still three years from taking effect, then-IASB Chair Hans Hoogervorst made the case for pulling leases onto the balance sheet in blunt terms.
That was the pitch. A decade on, with thousands of companies now carrying right-of-use assets and lease liabilities on their balance sheets, the IASB opened a formal Post-implementation Review (PIR) to check whether the pitch held up.
On 17 June 2025, the Board published a Request for Information asking exactly that — whether IFRS 16 is meeting its objectives for investors, preparers, auditors and regulators. The comment window closed on 15 October 2025, and the Board has spent subsequent meetings working through what came back.
What the feedback actually says
The headline finding, echoed in comment letters including EFRAG's, is reassuring for anyone who spent 2018 and 2019 buried in transition workpapers: the standard is generally working well, especially for straightforward lease arrangements. IFRS 16 has largely met its original objective — investors and other users get more transparent, more comparable information now that most leases sit on the balance sheet instead of buried in a footnote.
That doesn't mean it was painless. Preparers reported significant implementation costs when the standard first landed, and for lease-intensive industries — retail, transport, hospitality — the ongoing cost of running lease accounting remains high. The upside preparers pointed to is real too: better internal controls, tighter lease monitoring, and cleaner underlying data than most companies had before 2019.
The more technical complaint concerns scope. Reviewers flagged genuine uncertainty about whether certain contracts fall within IFRS 16 at all — particularly arrangements involving intangible assets such as software licences and cloud computing services. Layered on top of that is a recurring headache: distinguishing a straightforward lease from what's actually an in-substance purchase of an asset. Neither issue is new to anyone who's tried to classify a SaaS contract or a build-to-suit arrangement, but seeing it named explicitly in PIR feedback is a useful confirmation that the ambiguity isn't just a you-problem.
What the IASB decided in June 2026
At its meeting on 23 June 2026, the Board moved from listening mode to a handful of tentative decisions. None of these are finalised amendments — they're votes to start or stop specific pieces of work — but they tell you where the Board's attention is heading next.
First, and most significant for day-to-day practice: 12 of 13 members agreed to add a narrow-scope standard-setting project on how lessees apply IFRS 16 and IFRS 9 requirements for rent concessions. This runs alongside a separate research initiative looking at cost-reduction measures more broadly — a nod to the fact that rent concessions were a live issue during the pandemic and clearly still generate enough inconsistency to warrant a proper look.
Second, the Board unanimously (13 of 13) removed "Sale and Leaseback of an Asset in a Single-asset Entity" from its maintenance project pipeline. That's not a rejection of the issue — it's being deferred to the next agenda consultation, where the Board will weigh it against other "corporate wrapper" matters competing for the same limited resources.
Third, and arguably the most consequential decision for anyone hoping for sweeping change: the Board took no action on several other flagged issues, including IFRS 16's interaction with IFRS 15 (revenue), IAS 38 (intangibles), lessor accounting requirements, and — notably — the criteria used to identify a lease in the first place. Given that lease identification was one of the scope pain points raised in the feedback, choosing not to act on it is itself a signal worth noting.
- Rent concessions: new narrow-scope project approved (12 of 13 votes) — work is starting
- Single-asset entity sale-and-leaseback: paused, deferred to the next agenda consultation (13 of 13 votes)
- IFRS 15 / IAS 38 interactions, lessor rules, lease-identification criteria: no action taken
What's next
The IASB has said it intends to publish a Project Summary and Feedback Statement, with its next relevant meeting scheduled for July 2026. As of this article's publication date, that document had not yet been confirmed as released — so treat the June 2026 decisions as the current state of play, not the final word. The IASB's IFRS 16 work plan page is the place to check for the actual publication once it lands.
It's also worth being precise about what "tentative decision" means here. These are Board votes taken during a public meeting, recorded and reported, but they are not amendments to IFRS 16. A narrow-scope project on rent concessions has to go through the usual due process — drafting, exposure, further consultation — before anything changes in how you actually account for a rent-free period or a temporary reduction. Don't restate anything based on this article.
What this means for you (our take)
The following is commentary, not confirmed IASB policy — our read on how this plays out for finance teams over the next year or two.
If your lease portfolio includes any rent concessions, negotiated reductions, or deferral arrangements, this is the item to bookmark. A narrow-scope project moving forward means new guidance is more likely than not eventually, even if the timeline stretches well into 2027 or beyond. It won't retroactively change anything you've already recorded, but it's worth flagging to whoever owns your lease accounting policy so it's on their radar rather than a surprise later.
The scope question around software licences and cloud computing is the more immediate practical issue, even though the Board didn't formally act on it this round. If your organisation has been making judgment calls about whether a SaaS arrangement or a cloud hosting contract contains an embedded lease, the PIR feedback confirms you're not alone in finding that boundary blurry — our guide on identifying embedded leases walks through the current criteria in detail. Given the Board explicitly declined to touch lease identification for now, that ambiguity isn't going away on its own; document your judgment and be consistent.
More broadly, this review is a reminder that IFRS 16 isn't going anywhere and isn't being fundamentally redesigned. If you're still running lease calculations in spreadsheets, the stability here is actually good news — it's a fine time to tighten up your process rather than wait for a standard that might change under you. For teams weighing IFRS 16 against US GAAP requirements, our IFRS 16 vs ASC 842 comparison is a useful next read, particularly given the PIR feedback themes overlap with issues ASC 842 preparers have also run into.
Key takeaways
The essentials, if you're skimming:
- The IASB's Post-implementation Review found IFRS 16 is generally working well, especially for straightforward leases, and has broadly met its objective of improving lease transparency
- Preparers reported high implementation and ongoing costs, offset by better internal controls and data quality
- A key pain point: scope uncertainty for software licences, cloud computing contracts, and distinguishing leases from in-substance purchases
- In June 2026, the IASB tentatively agreed to a narrow-scope project on rent concessions (IFRS 16 / IFRS 9), alongside separate cost-reduction research
- The Board deferred sale-and-leaseback of single-asset entities and took no action on lease identification, lessor rules, or IFRS 15/IAS 38 interactions
- None of this changes current accounting requirements — a Project Summary and Feedback Statement is still to come
Whatever happens next with rent concessions or scope guidance, the core mechanics of IFRS 16 — right-of-use asset, lease liability, amortisation schedule, journal entries — aren't changing today. If you want to see how a lease actually calculates out under current rules, the free calculator runs a full ASC 842 / IFRS 16 schedule in seconds, no spreadsheet required.
“All leases will be recognized as assets and liabilities by lessees, better reflecting the underlying economics.”
| Topic | IASB's June 2026 tentative decision | Status |
|---|---|---|
| Rent concessions (IFRS 16 & IFRS 9 interaction) | Add a narrow-scope standard-setting project, run alongside separate research into cost-reduction measures | Moving forward |
| Sale and leaseback of a single-asset entity | Removed from the maintenance pipeline; deferred to the next agenda consultation | Paused, not dropped |
| Interaction with IFRS 15 (sale recognition, gain/loss) | No action taken | Off the table for now |
| Interaction with IAS 38 (intangibles, software, cloud) | No action taken | Off the table for now |
| Lessor requirements | No action taken | Off the table for now |
| Lease-identification criteria | No action taken | Off the table for now |
Frequently asked questions
Is IFRS 16 being rewritten?
No. The IASB's post-implementation review concluded the standard is broadly working as intended, especially for straightforward leases. The Board has opened one narrow-scope project on rent concessions, but it explicitly declined to reopen lease identification, lessor accounting, or the standard's core structure. This is targeted maintenance, not a rewrite.
What is a post-implementation review?
It's a formal check the IASB runs a few years after a major standard takes effect, to see whether it's meeting its objectives in practice. For IFRS 16, that meant a Request for Information published in June 2025, a public comment period that closed in October 2025, and Board discussions through 2026 on what the feedback showed and what, if anything, needs fixing.
Will rent concession accounting change under IFRS 16?
Possibly, but nothing is finalised yet. At its June 2026 meeting the IASB agreed (12 of 13 members) to add a narrow-scope project clarifying how lessees apply IFRS 16 and IFRS 9 to rent concessions, alongside separate research into other cost-reduction measures. That's a decision to start work, not a new rule — any actual amendment would still need to go through exposure and consultation.
Does the IFRS 16 review affect ASC 842 too?
Not directly. ASC 842 is a separate standard issued by the US FASB, and the IASB's review has no formal authority over it. But the feedback themes — implementation costs, scope questions around software and cloud contracts, and calls for clearer guidance — are a useful signal for anyone applying ASC 842 as well, since both standards share the same on-balance-sheet lessee model. See our IFRS 16 vs ASC 842 comparison for where the two diverge.
When will the IASB publish its final findings?
The Board has said it plans to publish a Project Summary and Feedback Statement, with its next relevant meeting scheduled for July 2026. As of this article's publication, that document had not yet been released — check the IASB's IFRS 16 work plan page for the latest status.
Sources
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