{"id":"F2022L01500","name":"Accounting Standard AASB 2022-5 Amendments to Australian Accounting Standards – Lease Liability in a Sale and Leaseback","slug":"accounting-standard-aasb-2022-5-amendments-to-australian-accounting-standards-lease-liability-in-a-s","collection":"legislative_instrument","jurisdiction":"commonwealth","status":"in_force","isInForce":true,"actNumber":null,"makingDate":null,"administeringDepartment":null,"currentVersion":{"id":102878,"registerId":"commonwealth-F2022L01500-current","compilationNumber":null,"startDate":"2026-04-03","status":"InForce","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"Obtaining a copy of this Accounting Stan","sectionType":"part","heading":"Obtaining a copy of this Accounting Standard","content":"# Obtaining a copy of this Accounting Standard\n\nThis Standard is available on the AASB website: www.aasb.gov.au.\n\nAustralian Accounting Standards Board\n\nPO Box 204\n\nCollins Street West\n\nVictoria 8007\n\nAUSTRALIA\n\nPhone: (03) 9617 7600\n\nE-mail: standard@aasb.gov.au\n\nWebsite: www.aasb.gov.au","sortOrder":0},{"sectionNumber":"Other enquiries","sectionType":"part","heading":"Other enquiries","content":"# Other enquiries\n\nPhone: (03) 9617 7600\n\nE-mail: standard@aasb.gov.au\n\nCOPYRIGHT\n\n© Commonwealth of Australia 2022\n\nThis AASB Standard contains IFRS Foundation copyright material. Reproduction within Australia in unaltered form (retaining this notice) is permitted for personal and non-commercial use subject to the inclusion of an acknowledgment of the source. Requests and enquiries concerning reproduction and rights for commercial purposes within Australia should be addressed to The Managing Director, Australian Accounting Standards Board, PO Box 204, Collins Street West, Victoria 8007.\n\nAll existing rights in this material are reserved outside Australia. Reproduction outside Australia in unaltered form (retaining this notice) is permitted for personal and non-commercial use only. Further information and requests for authorisation to reproduce for commercial purposes outside Australia should be addressed to the IFRS Foundation at www.ifrs.org.\n\nISSN 1036-4803","sortOrder":1},{"sectionNumber":"Contents","sectionType":"part","heading":"Contents","content":"# Contents\n\nPreface\n\nAccounting Standard\n\nAASB 2022-5 Amendments to Australian Accounting Standards – Lease Liability in a Sale and Leaseback\n\nfrom page\n\nObjective 5\n\nApplication 5\n\nAmendments to AASB 16 5\n\nCOMMENCEMENT OF THE LEGISLATIVE INSTRUMENT 6\n\naVailable on the AASB website\n\nIASB Illustrative examples – Amendments\n\nIASB Basis for Conclusions – Amendments\n\nAustralian Accounting Standard AASB 2022-5 Amendments to Australian Accounting Standards – Lease Liability in a Sale and Leaseback is set out on pages 5 – 6. All the paragraphs have equal authority.","sortOrder":2},{"sectionNumber":"Preface","sectionType":"part","heading":"Preface","content":"# Preface\n\n## Standards amended by AASB 2022-5\n\nThis Standard makes amendments to AASB 16 Leases (February 2016).\n\nThese amendments arise from the issuance of International Financial Reporting Standard Lease Liability in a Sale and Leaseback (Amendments to IFRS 16) by the International Accounting Standards Board (IASB) in September 2022.\n\n## Main features of this Standard\n\nMain requirements\n\nThis Standard amends AASB 16 to add subsequent measurement requirements for sale and leaseback transactions that satisfy the requirements in AASB 15 Revenue from Contracts with Customers to be accounted for as a sale.\n\nAASB 16 already requires a seller-lessee to recognise only the amount of any gain or loss that relates to the rights transferred to the buyer-lessor. The amendments made by this Standard ensure that a similar approach is applied by also requiring a seller-lessee to subsequently measure lease liabilities arising from a leaseback in a way that does not recognise any amount of the gain or loss related to the right of use it retains.\n\nApplication date\n\nThis Standard applies to annual periods beginning on or after 1 January 2024. Earlier application is permitted.","sortOrder":3},{"sectionNumber":"Standards amended by AASB 2022-5","sectionType":"part","heading":"Standards amended by AASB 2022-5","content":"## Standards amended by AASB 2022-5\n\nThis Standard makes amendments to AASB 16 Leases (February 2016).\n\nThese amendments arise from the issuance of International Financial Reporting Standard Lease Liability in a Sale and Leaseback (Amendments to IFRS 16) by the International Accounting Standards Board (IASB) in September 2022.","sortOrder":4},{"sectionNumber":"Main features of this Standard","sectionType":"part","heading":"Main features of this Standard","content":"## Main features of this Standard\n\nMain requirements\n\nThis Standard amends AASB 16 to add subsequent measurement requirements for sale and leaseback transactions that satisfy the requirements in AASB 15 Revenue from Contracts with Customers to be accounted for as a sale.\n\nAASB 16 already requires a seller-lessee to recognise only the amount of any gain or loss that relates to the rights transferred to the buyer-lessor. The amendments made by this Standard ensure that a similar approach is applied by also requiring a seller-lessee to subsequently measure lease liabilities arising from a leaseback in a way that does not recognise any amount of the gain or loss related to the right of use it retains.\n\nApplication date\n\nThis Standard applies to annual periods beginning on or after 1 January 2024. Earlier application is permitted.","sortOrder":5},{"sectionNumber":"Accounting Standard AASB 2022-5","sectionType":"part","heading":"Accounting Standard AASB 2022-5","content":"# Accounting Standard AASB 2022-5\n\nThe Australian Accounting Standards Board makes Accounting Standard AASB 2022-5 Amendments to Australian Accounting Standards – Lease Liability in a Sale and Leaseback under section 334 of the Corporations Act 2001.\n\n|                        | Dr Keith Kendall |\n| ---------------------- | ---------------- |\n| Dated 10 November 2022 | Chair – AASB     |","sortOrder":6},{"sectionNumber":"Objective","sectionType":"part","heading":"Objective","content":"## Objective\n\nThis Standard amends AASB 16 Leases (February 2016) as a consequence of the issuance of International Financial Reporting Standard Lease Liability in a Sale and Leaseback (Amendments to IFRS 16) by the International Accounting Standards Board in September 2022.","sortOrder":8},{"sectionNumber":"Application","sectionType":"part","heading":"Application","content":"## Application\n\nThe amendments set out in this Standard apply to entities and financial statements in accordance with the application of AASB 16 set out in AASB 1057 Application of Australian Accounting Standards.\n\nThis Standard applies to annual periods beginning on or after 1 January 2024.\n\nThis Standard may be applied to annual periods beginning before 1 January 2024. When an entity applies this Standard to such an annual period, it shall disclose that fact.\n\nThis Standard uses underlining, striking out and other typographical material to identify the amendments to AASB 16, in order to make the amendments more understandable. However, the amendments made by this Standard do not include that underlining, striking out or other typographical material. Ellipses (…) are used to help provide the context within which amendments are made and also to indicate text that is not amended.","sortOrder":9},{"sectionNumber":"Amendments to AASB 16 Leases","sectionType":"part","heading":"Amendments to AASB 16 Leases","content":"## Amendments to AASB 16 Leases\n\n| Paragraphs 102A, C1D and C20E are added and paragraph C2 is amended. A new heading is added before paragraph C20E. New text is underlined, and deleted text is struck through. |\n| ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |\n\nSale and leaseback transactions\n\n    ...\n\nAssessing whether the transfer of the asset is a sale\n\n    ...\n\nTransfer of the asset is a sale\n\n    ...\n    102A After the commencement date, the seller-lessee shall apply paragraphs 29–35 to the right-of-use asset arising from the leaseback and paragraphs 36–46 to the lease liability arising from the leaseback. In applying paragraphs 36–46, the seller-lessee shall determine ‘lease payments’ or ‘revised lease payments’ in a way that the seller-lessee would not recognise any amount of the gain or loss that relates to the right of use retained by the seller-lessee. Applying the requirements in this paragraph does not prevent the seller-lessee from recognising in profit or loss any gain or loss relating to the partial or full termination of a lease as required by paragraph 46(a).\n    ...\n\nAppendix C  \nEffective date and transition\n\nEffective date\n\n    ...\n    C1D AASB 2022-5 Amendments to Australian Accounting Standards – Lease Liability in a Sale and Leaseback, issued in November 2022, amended paragraph C2 and added paragraphs 102A and C20E. A seller-lessee shall apply these amendments for annual reporting periods beginning on or after 1 January 2024. Earlier application is permitted. If a seller-lessee applies these amendments for an earlier period, it shall disclose that fact.\n\nTransition\n\n    C2 For the purposes of the requirements in paragraphs C1–C20E C19, the date of initial application is the beginning of the annual reporting period in which an entity first applies this Standard.\n    ...\n\nLease liability in a sale and leaseback\n\n    C20E A seller-lessee shall apply AASB 2022-5 Amendments to Australian Accounting Standards – Lease Liability in a Sale and Leaseback (see paragraph C1D) retrospectively in accordance with AASB 108 to sale and leaseback transactions entered into after the date of initial application.","sortOrder":10},{"sectionNumber":"Commencement of the legislative instrume","sectionType":"part","heading":"Commencement of the legislative instrument","content":"## Commencement of the legislative instrument\n\nFor legal purposes, this legislative instrument commences on 31 December 2023.","sortOrder":11}],"analysis":{"flash_summary":{"complexity_score":4,"scope_assessment":{"changed":false,"description":"The amendment does not broaden which transactions qualify as sales under AASB 15; it adds a subsequent‑measurement rule for lease liabilities arising from sale-and-leaseback transactions so gains related to retained rights are not recognised (see para 102A). It applies from annual periods beginning on or after 1 January 2024 with retrospective application per AASB 108 to transactions after the entity's date of initial application (paras C1D, C20E)."},"complexity_factors":["Narrow, targeted amendment to AASB 16 adding paragraph 102A — limited scope reduces complexity.","Requires coordination with AASB 15 sale assessment (judgement whether transfer is a sale) — judgemental application increases complexity (see para 102A).","Mandates subsequent measurement of lease liabilities to exclude gain/loss attributable to retained right‑of‑use — requires recalculation of ‘lease payments’/‘revised lease payments’ (para 102A).","Retrospective application in accordance with AASB 108 to sale-and-leaseback transactions entered after date of initial application (para C20E) — introduces restatement and systems work.","Effective date and transition rules (para C1D, C2) permit earlier application but require disclosure if used — governance and disclosure burdens.","Interaction with existing AASB 16 mechanics (eg paragraphs 29–46 referenced in 102A) and with AASB 1057 application framework requires cross‑standard alignment."],"plain_english_summary":"This amendment changes how seller-lessees account for sale-and-leaseback deals that qualify as sales under AASB 15. Mechanically, it requires that the lease liability recognised after a sale/leaseback be measured so that any gain or loss attributed to the right‑of‑use retained by the seller is not recognised in profit or loss. It affects entities preparing financial statements under AASB 16 (seller-lessees), and matters for reported liabilities, profits and comparability from annual periods starting 1 January 2024."},"flash_summary_failed":{"failed":true,"reason":"Unauthenticated. Configure AI_GATEWAY_API_KEY or use a provider module. Learn more: https://ai-sdk.dev/unauthenticated-ai-gateway","source":"analysis-cron"},"kimi_summary":{"content_quality":"ok","complexity_score":4,"scope_assessment":{"changed":false,"description":"This amendment remains tightly scoped to its original purpose. It addresses a specific technical gap in lease liability measurement for sale and leaseback transactions, exactly as intended when the IASB developed the corresponding IFRS amendment. The scope has not expanded beyond the narrow issue of preventing double-counting of gains/losses in these specific transactions."},"complexity_factors":["Highly technical subject matter requiring understanding of lease accounting mechanics (right-of-use assets, lease liabilities, gain/loss recognition)","Cross-references to multiple other standards: AASB 16 (Leases), AASB 15 (Revenue), AASB 108 (Accounting Policies), AASB 1057 (Application of Standards)","Retrospective application requirement (must restate past transactions)","Nested conditions: applies only to sale and leaseback transactions that satisfy AASB 15 requirements to be accounted for as a sale","Specific measurement methodology required (determining 'lease payments' or 'revised lease payments' to exclude retained right-of-use gains/losses)","Exception to the exception: allows recognition of gains/losses on partial/full lease termination per paragraph 46(a) despite the general prohibition"],"plain_english_summary":"This amendment to AASB 16 fixes how seller-lessees measure the lease liability in sale-and-leaseback deals so they don’t recognise gains or losses twice. It requires measuring the liability to exclude any retained‑use portion that was already reflected in the sale, improving the accuracy of profit and debt reporting. It affects entities reporting under Australian Accounting Standards (including public and large proprietary companies), their auditors, and takes effect for annual periods from 1 Jan 2024 (early adoption allowed)."}},"importantCases":[],"_links":{"self":"/api/acts/accounting-standard-aasb-2022-5-amendments-to-australian-accounting-standards-lease-liability-in-a-s","history":"/api/acts/accounting-standard-aasb-2022-5-amendments-to-australian-accounting-standards-lease-liability-in-a-s/history","analysis":"/api/acts/accounting-standard-aasb-2022-5-amendments-to-australian-accounting-standards-lease-liability-in-a-s/analysis","conflicts":"/api/acts/accounting-standard-aasb-2022-5-amendments-to-australian-accounting-standards-lease-liability-in-a-s/conflicts","importantCases":"/api/acts/accounting-standard-aasb-2022-5-amendments-to-australian-accounting-standards-lease-liability-in-a-s/important-cases","documents":"/api/acts/accounting-standard-aasb-2022-5-amendments-to-australian-accounting-standards-lease-liability-in-a-s/documents"}}