IFRS 16 Lease Accounting: Common Pitfalls for UAE Groups

IFRS 16 changed how lessees recognize leases on the balance sheet. UAE and GCC groups with property, fleet, and equipment contracts need robust models.

Discount rates: Using the wrong incremental borrowing rate materially affects liability and ROU asset values.

Short-term exemptions: Misclassifying leases that do not qualify for the exemption creates restatement risk.

Disclosures: Investors expect clear maturity analysis and sensitivity tables — not boilerplate footnotes.

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