Remeasurement
The recalculation of the lease liability (and corresponding right-of-use asset) when lease payments, the lease term, or other assumptions change.
Definition
Remeasurement of the lease liability is required when there is a change in future lease payments resulting from a change in an index or rate (such as CPI or RPI), a reassessment of whether a purchase, renewal, or termination option will be exercised, or a lease modification that does not create a separate lease. The lease liability is remeasured using a revised discount rate where appropriate, and the corresponding right-of-use asset is adjusted.
Why it matters
Remeasurement can materially change the balance sheet carrying amounts of the lease liability and ROU asset. It must be triggered and recorded correctly to produce accurate financial statements.
In AuditLease
AuditLease creates new calculation runs rather than overwriting completed ones, so the full remeasurement history is preserved for audit.
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.