Adopting NZ IFRS 16

Adopting NZ IFRS 16

NZ IFRS 16 becomes effective for year ends 31 December 2019 and beyond, and fundamentally transforms the way lessees will account for their leases.

NZ IFRS 16 can be a complicated standard to apply upon adoption, and then as “business as usual”.

As entities begin to adopt NZ IFRS 16, many are coming to the conclusion that assistance from external experts to navigate through the complexity is a necessity.

This is where BDO Accounting Advisory Services can step in for your entity.

Who are BDO IFRS Advisory?

BDO IFRS Advisory are BDO’s dedicated service line that lives and breathes all things accounting-standards-related.

Our team has the benefit of having sat on both sides of the NZ IFRS 16 adoption divide…from being the party knee-deep in the adoption, to the party reviewing and assessing the adoption. 

For this reason, and many more, we are an entity’s best choice to assist in adopting NZ IFRS 16.

Please refer to our "Getting Ready for NZ IFRS 16 Leases" Cheat Sheet


What needs to be done to adopt NZ IFRS 16?


While accounting standards are not an entity’s enemy, Sun Tzu’s famous quote from the Art of War at the top of this page is very apt when thinking about how to approach the adoption NZ IFRS 16.

This is because the effort and expertise required will vary entity-to-entity, depending on:

  • The size and age of an entity’s lease population
  • The nature of the items leased
  • The nature of an entity’s Group Structure
  • Which general accounting options an entity plans to elect
  • Which adoption options an entity plans to use.

Refer to our specific BDO Cheat Sheet for more details.

As a result, a successful (and more importantly, compliant) adoption of NZ IFRS 16 is less likely when an entity:

  1. Key lease-related information is unknown, and
  2. An entity is unaware of the relevant application areas and “fishhooks” within NZ IFRS 16.

To refer to another apt quote from The Art of War: 

“Victorious warriors win first and then go to war, while defeated warriors go to war first and then seek to win”

The take away message here is simple: “Plan, plan… and then plan some more”.


Planning for adopting NZ IFRS 16


Hindsight is a great thing for those that are following in the footsteps of those that have gone before them, which is great, as a number of entities have already adopted NZ IFRS 16 and their experiences are out there for the rest to learn from.

If you talk to those entities, they will almost certainly tell you that adopting NZ IFRS 16 is not as straight-forward as “running some numbers in a spread sheet”, even for what appears to be a relatively “simple” lease population at the outset.

This is because more often than not there are various judgements to be made, estimates to be determined, accounting options to be decided upon, and nuanced complexities to be worked through.

All of which will need to be worked through and resolved well before an entity is at the "spreadsheet stage" of their adoption journey.

For examples of these areas, refer to our specific BDO Cheat Sheet on this topic.


​How BDO’s IFRS Advisory team can help you


BDO adopts a flexible approach to assisting entities with their adoption to NZ IFRS 16, meaning we can be as involved as an entity requires.

That being said, we have come up with some bundled product and service offerings to assist entities with kicking off their planning phase.




  • Planning template x1
  • Consultation time 3 – 5 hrs
  • Planning template x2
  • Consultation 3 – 5 hrs
  • Planning template x3
  • Consultation 3 – 5 hrs


Planning templates available

Examples of use of Consultation time

  • Adoption Plan document
  • Lease information compilation spreadsheet
  • Lease payment schedule (with illustrative examples)


  • Initial education sessions with management
  • Attending management or Project Steering Committee meetings
  • Staff training sessions
  • Assisting with compiling an entity’s:
    • Adoption Plan
    • Lease information compilation spreadsheet
    • Lease payment schedules
  • Review of lease agreements.
  • Reviewing general ledger balances of lease completeness
  • Ad-hoc queries and questions

If required, additional Consultation time can be added either upfront, or along the way.

Also, BDO IFRS Advisory remains avaible to be engaged to undertake certain aspects of an entity's Adoption Plan once formulated.

As always, we stand-ready to assist our clients in any way that they need. The nature and costing of such work will be agreed on an engagement-by-engagement basis.


BDO’s very own lease accounting software solution – BDO LEAD


BDO is the only large global accounting firm to publically offer a dedicated lease accounting software solution, both as an all-in licence, or as a managed service.

Accounting software solutions act to replace manual spreadsheet accounting, which may be necessary or preferred in instances where:

  • There is a large lease population
  • There are a moderate number of leases requiring recalculation over their term, i.e. property leases
  • The entity is subject to external Audit
  • There are group entities who also report under US GAAP, and/or
  • There is limited people-power and resources to adopt a manual, spreadsheet-based approach.

Refer to the BDO LEAD page for more information.


Where to get the latest BDO publications and training content


BDO has a wide array of publications and other training material free available.

Below is an up to date one-stop-shop of this material for entities to access:

BDO Summary on a Page

BDO’s high-level overview of NZ IFRS 16 requirements conveniently reduced onto all of three pages.

BDO Comprehensive publications

BDO Need to Know

BDO’s detailed 64 page publication covering the technical aspects of appliying (NZ) IFRS 16.

BDO IFRS in Practice

BDO’s detailed 14 page publication building on the technical aspects of the above Need to Know publication, as well as also including various illustrative examples and commentary on issues currently being encountered in practice.

BDO IFRS Advisory “Cheat Sheets”

BDO’s short, “punchy” publications related to specific aspects of applying NZ IFRS 16

Click on each topic heading below to download your own copy

Online training – BDO Rise

Disaggregated training modules focusing on various specific aspects of NZ IFRS 16 application, including:

  • High-level introduction
  • Reccognition exemptions
  • Identifying a lease
  • Determining the lease term (lessee)
  • Recognition and measurement (lessee)
  • Sale and leaseback transactions
  • Presentation
  • Lessor accounting
  • Transition

You Tube Video – with BDO’s Global head of IFRS

Short 7 minute high-level overview of (NZ) IFRS 16 with BDO’s Global head of IFRS, Andrew Buchanan.


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