Course Introduction
The Lease Accounting and IFRS 16 Auditing Training Course provides a comprehensive framework for understanding, accounting for, and auditing lease transactions under IFRS 16. Participants will develop practical skills for identifying lease arrangements, evaluating recognition and measurement requirements, testing lease calculations, and assessing the accuracy of related financial statement balances and disclosures.
The course examines the complete lease lifecycle, from contract identification and commencement through subsequent measurement, modifications, reassessments, renewals, terminations, and lease completion. Participants will learn how to evaluate lease contracts and determine whether arrangements contain leases, while identifying key terms that influence accounting treatment and audit procedures.
A major focus is placed on the lessee accounting model, including recognition of right-of-use assets and lease liabilities. Participants will learn how to test initial measurement, discount rates, lease payments, lease incentives, initial direct costs, restoration obligations, depreciation, interest expense, and subsequent remeasurement, with practical exercises designed to reinforce audit procedures.
The program also addresses lessor accounting, short-term leases, low-value asset exemptions, variable lease payments, lease modifications, sale and leaseback arrangements, and other complex scenarios. Participants will examine how changes in contractual terms can affect accounting balances and learn how to assess whether management has appropriately identified and accounted for those changes.
Participants will develop audit techniques for reviewing lease populations, reconciling lease registers to accounting records, testing contractual terms, recalculating lease liabilities, evaluating right-of-use assets, and assessing completeness. Particular attention is given to identifying unrecorded leases, incorrect lease terms, inappropriate discount rates, missing modifications, and errors in financial statement disclosures.
Through practical lease calculations, contract reviews, audit case studies, reconciliations, analytical procedures, and working-paper exercises, participants will strengthen their ability to audit IFRS 16 accounting. By completing the course, they will be better prepared to evaluate lease accounting controls, challenge significant judgments, identify misstatements, and communicate audit findings effectively.
Duration
5 days
Who Should Attend
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Internal auditors responsible for reviewing lease accounting and IFRS 16 compliance.
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External auditors performing financial statement audits involving significant lease portfolios.
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Accountants responsible for lease accounting, reporting, and financial statement preparation.
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Financial controllers overseeing lease balances, calculations, reconciliations, and disclosures.
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Finance managers responsible for implementing and monitoring IFRS 16 requirements.
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Treasury professionals involved in discount rates, financing considerations, and lease-related obligations.
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Procurement and contract management professionals responsible for agreements that may contain leases.
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Legal and compliance professionals reviewing contractual arrangements and lease terms.
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Asset managers responsible for leased property, equipment, vehicles, and other assets.
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Risk professionals assessing financial reporting and contractual risks associated with leases.
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Accounting policy professionals responsible for IFRS interpretation and implementation.
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Audit managers and supervisors reviewing complex lease accounting and audit procedures.
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Financial reporting specialists responsible for IFRS 16 disclosures and reporting processes.
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Accounting and auditing consultants providing lease accounting assurance and advisory services.
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Finance and audit professionals preparing for responsibilities involving lease accounting and IFRS 16 auditing.
Course Objectives
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Develop a comprehensive understanding of IFRS 16 requirements and the audit implications of lease recognition, measurement, presentation, and disclosure.
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Identify lease arrangements within contracts and evaluate whether agreements contain identified assets and provide the required right to control their use.
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Apply effective audit procedures to test right-of-use assets, lease liabilities, depreciation, interest expense, and related financial statement balances.
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Recalculate lease liabilities using contractual lease payments, appropriate discount rates, lease terms, incentives, and other relevant measurement inputs.
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Evaluate management's determination of lease terms, including extension options, termination options, renewal assumptions, and reassessment events.
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Audit lease modifications, reassessments, variable payments, lease incentives, and other changes that may require adjustments to existing accounting balances.
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Assess accounting treatments for short-term leases, low-value assets, lessor arrangements, sale and leaseback transactions, and other specialized lease scenarios.
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Identify unrecorded or incorrectly recorded leases by reviewing contracts, procurement data, expense accounts, supplier information, and business activities.
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Evaluate IFRS 16 presentation and disclosure requirements and identify omissions, classification errors, inconsistencies, and unsupported disclosures.
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Prepare clear audit documentation and communicate lease accounting findings, control weaknesses, estimation issues, and practical recommendations effectively.
Comprehensive Course Outline
Module 1: IFRS 16 and Lease Audit Fundamentals
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Understand the purpose, scope, key principles, and financial reporting implications of IFRS 16.
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Examine major lease accounting concepts, audit assertions, inherent risks, and common sources of lease-related misstatement.
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Review the complete lease lifecycle from contract identification and commencement through measurement, modification, reassessment, and termination.
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Develop a risk-based audit approach for evaluating lease populations, controls, calculations, balances, and disclosures.
Module 2: Identifying Leases and Reviewing Contracts
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Evaluate contracts to determine whether an arrangement contains a lease under applicable IFRS 16 requirements.
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Identify specified assets, substitution rights, decision-making rights, and other contractual characteristics relevant to lease identification.
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Review property, equipment, vehicle, technology, service, outsourcing, and other agreements for embedded lease arrangements.
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Develop procedures for identifying unrecorded leases by comparing contract databases, procurement records, expense accounts, and operational information.
Module 3: Lease Term, Payments, and Discount Rates
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Evaluate contractual lease terms, renewal options, termination options, and management's assessment of reasonably certain periods.
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Test fixed, variable, indexed, usage-based, and other lease payments included in lease liability calculations.
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Assess the selection and application of appropriate discount rates and review supporting evidence for incremental borrowing rates where applicable.
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Identify errors in lease terms, payment schedules, discount rates, incentives, and other inputs that can materially affect reported balances.
Module 4: Right-of-Use Assets and Initial Measurement
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Audit the initial measurement of right-of-use assets by testing lease liabilities, payments, incentives, direct costs, and restoration obligations.
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Recalculate right-of-use asset balances and investigate differences between management calculations and independent audit expectations.
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Evaluate capitalization of appropriate initial costs and identify expenses incorrectly included in right-of-use asset balances.
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Reconcile recognized right-of-use assets to lease registers, contracts, general ledger accounts, and supporting documentation.
Module 5: Lease Liabilities and Subsequent Measurement
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Recalculate lease liability movements for interest, payments, additions, modifications, reassessments, and other changes during the reporting period.
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Test the accuracy and completeness of lease payment schedules and reconcile them to contractual obligations and cash disbursements.
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Evaluate current and non-current classifications of lease liabilities and identify inappropriate presentation or reconciliation differences.
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Analyze lease liability balances and movements to identify unusual fluctuations, calculation errors, and unrecorded changes.
Module 6: Depreciation, Interest, and Lease Expense
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Recalculate depreciation of right-of-use assets using appropriate commencement dates, useful lives, lease terms, and depreciation methods.
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Test interest expense calculations using opening lease liabilities, effective interest rates, and contractual payment schedules.
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Assess expense recognition for short-term leases, low-value leases, variable payments, and other arrangements outside the standard lessee measurement model.
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Reconcile lease-related depreciation, interest, and other expenses to the general ledger and financial statement presentation.
Module 7: Lease Modifications, Reassessments, and Complex Arrangements
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Audit lease modifications involving changes in scope, consideration, asset use, contractual terms, or lease payments.
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Evaluate reassessments resulting from changes in lease terms, renewal expectations, purchase options, indexes, rates, or other relevant circumstances.
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Examine sale and leaseback arrangements and assess whether the accounting treatment reflects the substance of the transaction.
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Identify errors arising from delayed recognition of modifications, incomplete contract reviews, or incorrect remeasurement procedures.
Module 8: Lessor Accounting and Specialized Lease Transactions
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Examine lessor accounting for operating and finance leases and evaluate the classification of lease arrangements.
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Audit lease income, receivables, residual values, incentives, and other balances arising from lessor arrangements.
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Review subleases and determine whether relevant contracts and accounting treatments have been appropriately assessed.
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Evaluate specialized arrangements involving property, equipment, vehicles, infrastructure, and other leased assets for appropriate accounting treatment.
Module 9: Lease Controls, Data Analytics, and Fraud Risks
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Evaluate internal controls over contract identification, lease data capture, approval, calculation, review, reconciliation, and reporting.
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Use data analysis to compare contract databases, supplier records, recurring expenses, lease registers, and accounting balances.
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Identify risks involving omitted leases, manipulated lease terms, inappropriate discount rates, unsupported modifications, and inaccurate payment schedules.
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Develop effective audit procedures for investigating discrepancies, unusual lease transactions, manual adjustments, and management override risks.
Module 10: Audit Completion, Reporting, and Practical Case Studies
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Evaluate IFRS 16 audit findings and determine the effect of identified errors on assets, liabilities, expenses, equity, and disclosures.
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Prepare comprehensive lease audit working papers documenting risks, contract evidence, calculations, reconciliations, exceptions, and conclusions.
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Assess IFRS 16 presentation and disclosure requirements and develop practical recommendations for improving lease accounting processes and controls.
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Apply integrated case studies involving lease identification, discount rates, right-of-use assets, modifications, reassessments, and financial reporting issues.
Training Approach
This course will be delivered by our skilled trainers who have vast knowledge and experience as expert professionals in the fields. The course is taught in English and through a mix of theory, practical activities, group discussion and case studies. Course manuals and additional training materials will be provided to the participants upon completion of the training.
Tailor-Made Course
This course can also be tailor-made to meet organization requirement. For further inquiries, please contact us on: Email: training@upskilldevelopment.com Tel: +254 721 331 808
Training Venue
The training will be held at our Upskill Training Centre. We also offer training for a group (at a discount of 10% to 50%) at requested location all over the world. The Onsite course fee covers the course tuition, training materials, two break refreshments, buffet lunch, airport transfers, Upskill gift package, and guided tour.
Visa application, travel expenses, dinners, accommodation, insurance, and other personal expenses are catered by the participant
Certification
Participants will be issued with Upskill certificate upon completion of this course.
Airport Pickup and Accommodation
Airport pickup and accommodation is arranged upon request. For booking contact our Training Coordinator through Email: training@upskilldevelopment.com, +254 721 331 808
Terms of Payment:
Unless otherwise agreed between the two parties’ payment of the course fee should be done 3 working days before commencement of the training so as to enable us to prepare better.
