Fixed payments
Lease payments that are fixed in amount and do not vary based on usage or external factors.
Definition
Fixed payments are included in the lease liability measurement. They include in-substance fixed payments — payments that appear variable in form but are in substance unavoidable. For example, a payment that is "waived if the underlying asset does not operate" may be in-substance fixed if the asset reliably operates.
Why it matters
Distinguishing fixed from variable payments determines what is included in the lease liability. Misclassifying in-substance fixed payments as variable understates the liability.
In AuditLease
When entering a lease in AuditLease, fixed payment amounts and any escalation rules are captured as part of the payment schedule.
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.