Reassessment
A review of key lease accounting assumptions — such as lease term or option exercise — when facts or circumstances change significantly.
Definition
Reassessment is required when there is a significant event or change in circumstances that is within the control of the lessee and affects whether the lessee is reasonably certain to exercise a renewal, purchase, or termination option. Examples include a significant leasehold improvement undertaken that makes it economically unfavourable to leave, or a decision to exercise or not exercise a break clause. On reassessment, the lease liability is remeasured using a revised discount rate at the reassessment date.
Why it matters
Failing to reassess when circumstances change means the lease term and payments recognised in the balance sheet may no longer reflect economic reality, which could mislead readers of the financial statements.
In AuditLease
AuditLease stores updated judgements at each reassessment point and preserves the evidence trail alongside the revised calculation run.
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.