BLM52050 - IFRS 16 Leases: IFRS 16 Lessees: Early Adopters

An entity which adopts IFRS 16 in a period beginning before 1 January 2019 will have prepared its tax computations for that period, and any following periods which also began before 1 January 2019 on the basis that IFRS 16 had not been adopted (see BLM51035). Any accounting entries which arise due to the adoption of IFRS 16 which have an effect on the entity’s computation of profits chargeable to tax must be reversed in the entity’s tax computations.

The tax computations should also include any adjustments necessary to reflect accounting entries which would have been made, and flowed through to the computations of profits chargeable to tax, had IFRS 16 not been adopted in those earlier periods.

For accounting periods beginning on or after 1 January 2019, s53 Finance Act 2011 is repealed and the change of basis provisions apply as if IFRS 16 was adopted in that period.