The practical answer IFRS 16 requires most lessees to recognise a right-of-use asset and a lease liability. The difficult work happens before the journal entry: finding all contracts that may contain leases, identifying the asset, assessing who controls its use, determining the enforceable lease term, separating service components and obtaining a supportable discount rate. A reliable process follows the contract from legal terms to accounting judgments, a present-value calculation, an approved lease schedule and periodic reconciliation. Posting equal monthly rent expense without this analysis is not the normal lessee model under IFRS 16, except when a recognition exemption is properly applied. First identify a lease A contract is or contains a lease when it conveys the right to control the use of an identified asset for a period of time in exchange for consideration. A contract called a service agreement may contain a lease, while a contract called a lease may include substan...