Lessee
The party that obtains the right to use an underlying asset under a lease.
Definition
The lessee is the entity that pays for the right to use an asset belonging to the lessor. Under IFRS 16 and amended FRS 102, the lessee must recognise a right-of-use asset and lease liability on the balance sheet for most leases.
Why it matters
IFRS 16 and amended FRS 102 fundamentally changed lessee accounting. The old distinction between operating and finance leases was removed for lessees, bringing almost all leases onto the balance sheet.
In AuditLease
AuditLease is built for lessees. It manages lease data, calculates liabilities and ROU assets, generates journals, and produces statutory disclosures from the lessee perspective.
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.