Incremental borrowing rate: Difference between revisions
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*[[DIA]] | *[[DIA]] | ||
*[[IFRS 16]] | *[[IFRS 16]] | ||
*[[Incremental]] | |||
*[[Internal rate of return]] | *[[Internal rate of return]] | ||
*[[Interest rate implicit in a lease]] | *[[Interest rate implicit in a lease]] | ||
Latest revision as of 14:35, 21 December 2020
Financial reporting - IFRS 16.
(IBR).
The lessee's Incremental Borrowing Rate is a key concept in financial reporting for leases under IFRS 16.
The incremental borrowing rate is the rate the lessee would pay to borrow:
- Over a term similar to the lease term
- With a similar security
When the interest rate implicit in the lease cannot be determined, the IBR shall be used instead, to discount the related lease liabilities and assets for reporting under IFRS 16.
Note that a lessees's incremental borrowing rate is likely to differ from their existing borrowing rate under other borrowing arrangements.
See also
Other links
Definitive guide to deriving IFRS 16 discount rates: The Treasurer
