Financial accounting updates — International Financial Reporting Standard 16 Leases implementation

Guidance on International Financial Reporting Standard (IFRS) 16 on Leases for NHS providers and commissioners. IFRS 16 will be implemented in the NHS from 1 April 2022.

Main guidance

DHSC Group Accounting Manual (GAM) IFRS 16 supplement

With IFRS 16 being applied from 2022/23, the GAM IFRS 16 supplement gives advance sight of the updates that will be made to the GAM for IFRS 16 implementation.
DHSC GAM IFRS 16 supplement

NHS IFRS 16 implementation guide

Our updated IFRS 16 implementation guide pulls together various sources of guidance and includes a timetable with milestones for IFRS 16 implementation. It also provides further details of individual tasks and national exercises that will support implementation of the Standard.
IFRS 16 implementation guide

NHS IFRS 16 frequently asked questions

This frequently asked questions (FAQ) document provides guidance on technical aspects of implementing IFRS 16 and will be updated over the coming year.

Supporting tools from DHSC

DHSC IFRS 16 implementation training presentation

This Powerpoint IFRS 16 Implementation Slide Deck from DHSC is a training slide deck that explains principles of the IFRS 16 and how accounting for leases changes under the new standard. It has been developed with finance and operational/commercial users in mind, to help colleagues assess the impact of IFRS 16 on accounting, budgeting and operations.

DHSC example lease register

This example lease register from DHSC is for recording of leases from the perspective of a lessee. This example register may be useful to entities that are considering what level of data is required to be collected to inform the accounting and budgeting entries for each lease, or have not yet developed a lease register or finalised a systems approach. It is shared for information purposes and does not form part of a mandatory data collection requirement.

DHSC lease accounting tool

The lease accounting tool previously published in 2020 is currently under review and will be available soon.

DHSC worked example spreadsheets

DHSC has developed a series of worked examples that illustrate the calculation of lease accounting entries and the impact on accounts in each scenario.

Worked examples: simplified scenarios

Worked examples: more complex examples

  • To be uploaded soon – Scenario three — operating lease (including upfront payments, initial direct costs and lease incentives)
  • Scenario four — finance lease (including different discount rates used by the lessee and the lessor)
  • To be uploaded soon – Scenario five — early termination of the lease
  • Scenario six — sublease arrangement
  • Scenario seven — cumulative catch up – operating lease on transition to IFRS 16
  • Scenario eight — sale and leaseback arrangement
  • Scenario nine — revaluation of the right of use asset
  • To be uploaded soon – Scenario 10 – reassessment of the lease liability (with no change in discount rate)
  • Scenario 11 – reassessment of the lease liability (with change in the discount rate)