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Proposed Ipsas On Leases What Is A Lease

Accounting Standards BoardRef: https://www.asb.co.za/proposed-ipsas-on-leases-what-is-a-lease/

Official source

Source domain: asb.co.za

Collected on 13 July 2026

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What this means

This document is a blog post on the Accounting Standards Board (ASB) website explaining the proposed IPSAS on leases and what a lease is. It states that in January 2021 the IPSASB published revised proposals for leases that are substantially aligned with IFRS 16, and that the proposed IPSAS would change lease accounting by removing the operating/finance lease classification for lessees. It explains that lessees must recognise lease assets (right-of-use) and lease liabilities for lease contracts, assess whether a contract conveys the right to control use of an asset, and separate lease and non-lease components (with certain optional practical expedients such as treating the whole contract as a single lease, or expensing short-term/low-value leases). The ASB says it will consider the impact when the IPSASB finalises the amendments in 2022 and invites readers to share views.

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Proposed IPSAS on leases: what is a lease?

Read the Accounting Standards Board’s explanation of the proposed IPSAS on leases, including the lease definition, lessee recognition requirements, contract assessment and practical expedients.

Who it is for: people seeking information about proposed public-sector lease accounting
How to act on it: Read the article on the Accounting Standards Board website.

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Proposed IPSAS on leases: what is a lease?

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Facts

Reference

https://www.asb.co.za/proposed-ipsas-on-leases-what-is-a-lease/

Key Takeaways

Published: March 8, 2021
Author/posted by: Julianne Vissie
Source: IPSASB revised proposals for leases published January 2021
Alignment: substantially aligned with IFRS 16 (unlike Exposure Draft 64 issued in 2018)
Change: operating vs finance lease classification removed for lessees
Recognition: lessees recognise lease asset (right to use) and lease liability on statement of financial position
Lease definition: contract (or part) that conveys the right to use an asset for a period of time in exchange for consideration
Assessment focus: whether the contract conveys right to control use of the asset (lessee makes important decisions)
Accounting: separate lease component (recognised) and non-lease component (expensed)
Optional expedient: lessees may not separate non-lease components by class of underlying asset; account for entire contract as a single lease (does not apply to lessors)
Other expedients: short-term leases and leases where underlying asset is low value can be expensed
ASB plan: consider impact when IPSASB finalises amendments in 2022
Disclaimer: prepared by ASB Secretariat for information only; not reviewed/approved by the Board
Accounting Standards Board (ASB)
IPSASB (International Public Sector Accounting Standards Board)
IFRS 16
Julianne Vissie
ASB Secretariat
Akismet