Document ID: chunk:federal_register_of_legislation:F2024C00049:body:0:p22
Version: federal_register_of_legislation:F2024C00049
Segment Type: other
Provision Reference: 
Character Range: 54097–57208

of the legislative instrument
Aus103.1 [Repealed]

Temporary exception arising from interest rate benchmark reform
104 A lessee shall apply paragraphs 105–106 to all lease modifications that change the basis for determining future lease payments as a result of interest rate benchmark reform (see paragraphs 5.4.6 and 5.4.8 of AASB 9). These paragraphs apply only to such lease modifications. For this purpose, the term 'interest rate benchmark reform' refers to the market-wide reform of an interest rate benchmark as described in paragraph 6.8.2 of AASB 9.
105 As a practical expedient, a lessee shall apply paragraph 42 to account for a lease modification required by interest rate benchmark reform. This practical expedient applies only to such modifications. For this purpose, a lease modification is required by interest rate benchmark reform if, and only if, both of these conditions are met:
(a) the modification is necessary as a direct consequence of interest rate benchmark reform; and
(b) the new basis for determining the lease payments is economically equivalent to the previous basis (ie the basis immediately preceding the modification).
106 However, if lease modifications are made in addition to those lease modifications required by interest rate benchmark reform, a lessee shall apply the applicable requirements in this Standard to account for all lease modifications made at the same time, including those required by interest rate benchmark reform.

Appendix A
Defined terms
This appendix is an integral part of the Standard.
commencement date of the lease (commencement date)  The date on which a lessor makes an underlying asset available for use by a lessee.
economic life                                       Either the period over which an asset is expected to be economically usable by one or more users or the number of production or similar units expected to be obtained from an asset by one or more users.
effective date of the modification                  The date when both parties agree to a lease modification.
fair value                                          For the purpose of applying the lessor accounting requirements in this Standard, the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm's length transaction.
finance lease                                       A lease that transfers substantially all the risks and rewards incidental to ownership of an underlying asset.
fixed payments                                      Payments made by a lessee to a lessor for the right to use an underlying asset during the lease term, excluding variable lease payments.
gross investment in the lease                       The sum of:
                                                    (a) the lease payments receivable by a lessor under a finance lease; and
                                                    (b) any unguaranteed residual value accruing to the lessor.
inception date of the lease (inception date)        The earlier of the date of a lease agreement and the date of commitment by the