IFRS 16 (EU-endorsed)

IFRS 16 Lease Calculator
Germany

IFRS 16 lease calculator with Germany-specific regulatory context, Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) / Deutsche Prüfstelle für Rechnungslegung (DPR/FREP) expectations, and local inspection findings.

Lease Terms

If checked, ROU asset depreciates over useful life instead of lease term (IFRS 16.32)

IFRS 16 Lease Audit Working Paper Template & Checklist — free PDF

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IFRS 16.26 — At the commencement date, a lessee shall measure the lease liability at the present value of the lease payments that are not paid at that date.

IFRS 16.23–24 — At the commencement date, a lessee shall measure the right-of-use asset at cost.

ISA 500 — Sufficient appropriate audit evidence for the lease liability as independent audit evidence.

ISA 540 — Auditing accounting estimates — applies to the IBR determination and lease term judgment.

IFRS 16 in Germany — IFRS 16 (EU-endorsed)

Germany adopted IFRS 16 through EU endorsement, effective for annual periods beginning on or after 1 January 2019. For German entities reporting under IFRS — primarily publicly listed companies (kapitalmarktorientierte Unternehmen) and their consolidated groups — IFRS 16 replaced IAS 17 and the previous operating/finance lease classification. Non-listed German entities typically report under HGB (Handelsgesetzbuch), where lease accounting follows different principles based on economic ownership (wirtschaftliches Eigentum) per the Leasingerlass. This calculator serves German IFRS reporters.

Regulatory Context — Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) / Deutsche Prüfstelle für Rechnungslegung (DPR/FREP)

The Deutsche Prüfstelle für Rechnungslegung (DPR/FREP — Financial Reporting Enforcement Panel) has examined IFRS 16 application in its enforcement reviews. Key findings include: inconsistencies in the application of the IBR across group entities, insufficient documentation of the reassessment trigger analysis, and inadequate disclosure of the impact on financial covenants. BaFin has issued general guidance on IFRS implementation through its interpretive decisions and has flagged IFRS 16 as an area of ongoing supervisory focus for financial institutions.

Practical Guidance for Germany

For German entities, the IBR should be derived from German market rates — reference the Bund yield curve for the risk-free component, add a credit spread reflecting the entity's creditworthiness, and adjust for the secured nature of the borrowing. For property leases in Germany, the standard commercial lease term is typically 5–10 years with renewal options. German commercial lease law (Mietrecht) provides fewer statutory protections than UK law, so lease term assessments depend more on contractual options and economic factors. Tax considerations are relevant: under HGB, operating lease payments are fully deductible; under IFRS 16, only the interest component and depreciation are recognised as expenses, which may differ in timing.

Audit Expectations

German audit firms (Wirtschaftsprüfungsgesellschaften) follow ISA (as adopted in Germany through EU regulation) plus the additional requirements of IDW auditing standards. IDW PS 314 (superseded by ISA 540 for IFRS audits) addresses the audit of accounting estimates — the IBR and lease term assessments are key estimates requiring auditor judgment. WPK (Wirtschaftsprüferkammer) and APAS (Abschlussprüferaufsichtsstelle) inspections have focused on the adequacy of auditor challenge for IFRS 16 estimates.

Germany-Specific Considerations

The parallel reporting requirement for many German groups — IFRS consolidated statements plus HGB individual entity statements — creates practical complexity. HGB does not have an equivalent to IFRS 16; instead, HGB leases are classified based on economic ownership criteria from the Leasingerlass (BMF letter on lease classification). An operating lease under HGB may simultaneously be a finance lease under pre-IFRS 16 IAS 17, or an on-balance-sheet lease under IFRS 16. For tax purposes, the Leasingerlass criteria determine the treatment, meaning IFRS 16 has no direct German tax impact — a significant difference from jurisdictions where IFRS is the tax basis.

Common Inspection Findings

Inconsistent IBR methodology across group entities — parent rate applied without subsidiary-level adjustments

Embedded leases in service and supply contracts not systematically identified

Reassessment trigger analysis not documented — lease modifications not captured timely

Transition calculations under modified retrospective approach contained errors in comparable group entities

Disclosure of lease term judgments for extension options was generic rather than entity-specific

Frequently Asked Questions — Germany

Is IFRS 16 relevant for German HGB reporters?
No. HGB (Handelsgesetzbuch) follows its own lease classification based on economic ownership (wirtschaftliches Eigentum) per the Leasingerlass. IFRS 16 only applies to German entities preparing IFRS consolidated financial statements — primarily listed companies. Non-listed entities reporting under HGB continue to classify leases based on the BMF criteria.
What has the DPR/FREP found regarding IFRS 16 in German financial statements?
The DPR has identified: inconsistent IBR application across subsidiaries within a group, insufficient disclosure of lease term judgment methodology, failure to identify embedded leases in complex service contracts, and inadequate sensitivity analysis for material discount rate assumptions. The DPR has also noted that some German groups have not adequately assessed the reassessment triggers in IFRS 16.40–43.
How does IFRS 16 interact with German trade tax (Gewerbesteuer)?
Gewerbesteuer adds back a portion of financing costs, including lease payments, to the tax base. Under IFRS 16, the add-back applies to the operating lease element (which no longer appears in IFRS financial statements). For trade tax purposes, the add-back continues to apply to the lease payments actually made, regardless of the IFRS 16 accounting treatment. The tax calculation is based on the HGB/tax accounts, not IFRS.
What discount rate should a German Mittelstand company use for IFRS 16?
For German middle-market companies (Mittelstand) preparing IFRS accounts, reference the Bund yield curve for the term-matched risk-free rate, add a credit spread from comparable Schuldschein or bank borrowing margins, and consider the secured nature of the borrowing. Many Mittelstand entities have well-documented KfW borrowing histories that provide direct IBR reference points.
How does the German Commercial Code affect IFRS 16 implementation?
The Handelsgesetzbuch requires certain disclosures about lease commitments in the notes to individual company accounts, regardless of whether IFRS is used for consolidated reporting. These HGB disclosure requirements are separate from IFRS 16 disclosures. German entities must maintain two parallel sets of lease information — HGB classification for individual accounts and IFRS 16 measurement for consolidated accounts.

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