Viewpoints: IFRS 16 leases – Key recognition considerations for oil and gas

Understand some key lease recognition issues in contractual arrangements common to the oil and gas industry, and how the accounting for such arrangements may be affected by IFRS 16.

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Developed jointly by Chartered Professional Accountants of Canada (CPA Canada), the Canadian Association of Petroleum Producers (CAPP), and the Explorers and Producers Association of Canada (EPAC), this paper addresses some key lease recognition issues in the oil and gas industry such as:

  • mineral leases and surface-land-use contracts
  • lateral pipeline use agreements
  • master lease agreements covering multiple assets
  • short-term leases and leases of low-value items
  • identifying leases embedded in services contracts
  • lease and non-lease components of contracts
  • discount rate