SONIA
Sterling Overnight Index Average — the Bank of England's overnight interest rate benchmark for GBP.
Definition
SONIA is published daily by the Bank of England and represents the average interest rate banks pay to borrow sterling overnight. It replaced LIBOR as the primary GBP benchmark rate. SONIA compounded over a relevant term period is used as the risk-free starting point for GBP lease OBR calculations.
Why it matters
SONIA-derived term rates are the standard benchmark for GBP IBR/OBR calculations in UK lease accounting. The rate is widely cited in professional guidance from ICAEW, KPMG, and others.
In AuditLease
AuditLease plans to incorporate SONIA as the default benchmark for GBP lease OBR calculations in Phase J.
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.