IFRS 16 – Leases – was issued in January 2016 and applies to accounting periods beginning on or after 1 January 2019. However, earlier application is permitted. IFRS 16 replaces IAS 17 – Leases. IFRS 16 makes substantial changes to the requirements for the recognition of rights and obligations under leasing arrangements for lessees.

Required: 
(a) Explain:

(iii) Any exceptions to the usual requirements you have outlined in (ii) above. Your answer should briefly describe the accounting treatment required in the case of such exceptions and, where appropriate, the types of assets which these exceptions might apply to. (4 marks)