Discount rate judgement
The documented professional judgement used to determine the discount rate applied to a specific lease.
Definition
The discount rate judgement captures how the rate was determined: which benchmark was used, what credit spread was applied, any lease-specific adjustments, and the basis for those assumptions. It forms a key part of the audit evidence for IFRS 16 and FRS 102 lease accounting.
Why it matters
Auditors expect to see the rationale behind every material discount rate. A judgement note should explain the method, the components, and why the resulting rate is appropriate for the specific lease and entity.
In AuditLease
AuditLease stores the discount rate judgement against each lease and surfaces it in the statutory accounts note key judgements section. It is part of the audit evidence chain.
Related terms
Put this into practice with AuditLease
AuditLease handles IFRS 16 and FRS 102 lease calculations, statutory note generation, journal entries, and audit evidence — so your team spends less time on spreadsheets and more time on judgements.
This definition is for general information only and is not accounting or legal advice. Definitions are based on IFRS 16, FRS 102, and associated guidance published by the IFRS Foundation and the Financial Reporting Council. Users should refer to the applicable accounting standards and their professional advisers for judgement-specific matters.