We examine how the International Accounting Standards Board (IASB) used the Conceptual Framework for Financial Reporting (Framework) in developing the new lease accounting standard International Financial Reporting Standard (IFRS) 16, Leases (IASB 2016b). We report three major findings in this paper. First, while the IASB used the Framework concepts to justify new lease accounting requirements, it also used an outside-the-Framework notion to justify a requirement. Second, accommodating constituents' demands, it introduced rules in IFRS 16 to mitigate their concerns relating to high implementation costs. Third, there are instances where the IASB did not apply appropriate concepts to justify lease accounting requirements. These findings have implications for setting IFRSs.

JEL Classifications: D71; D72; M41.

You do not currently have access to this content.