€STR
Euro Short-Term Rate — the European Central Bank's overnight interest rate benchmark for EUR.
Definition
€STR is published by the ECB and reflects the wholesale euro unsecured overnight borrowing costs of euro area banks. It is used as the risk-free starting point when estimating a EUR borrowing rate, particularly relevant for Irish entities and Eurozone lessees.
Why it matters
For EUR-denominated leases, €STR is the appropriate benchmark for estimating a EUR borrowing rate. Entities with cross-currency lease portfolios need to apply the right benchmark for each currency.
In AuditLease
AuditLease's borrowing rate suggestion panel can use a benchmark rate plus your entity credit spread to estimate a borrowing rate. You can use the accepted estimate as the IBR under either framework, or as the FRS 102 OBR where you judge it appropriate, or override it with your own rate.
Related terms
Official sources
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.