Identified asset
An asset that is explicitly or implicitly specified in a contract and is the subject of the customer's right to use.
Definition
A contract contains a lease only if there is an identified asset. An asset is identified if it is explicitly specified in the contract, or if it is implicitly specified at the time it is made available for use. An asset is not identified if the supplier has a substantive right to substitute the asset throughout the period of use — for example, where the supplier can practically and economically benefit from substituting alternative assets.
Why it matters
Identifying whether there is an identified asset is the first step in the lease assessment. Without an identified asset, there can be no lease. Many service contracts include dedicated equipment or space that may constitute an identified asset even if the contract is not labelled as a lease.
In AuditLease
AuditLease stores the underlying asset description and location for every lease, supporting the lease identification assessment and audit evidence.
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.