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This RFI is part of the IASB's due process aimed at evaluating whether IFRS 16 is functioning as intended and meeting its objectives. From ISCA's outreach, we understand that the principles underpinning IFRS 16 are fundamentally sound and have enabled entities to provide more faithful representation of information about leases than its predecessor, IAS 17.
However, applying IFRS 16 involves significant estimates and use of judgement, particularly in areas such as determining variable lease payments and incremental borrowing rates. We suggest that the IASB provide more clarification and guidance on these areas, while refraining from making significant changes since entities have already invested substantial efforts and costs in transitioning to IFRS 16.
Read more in our comment letter.