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Financial term
Glossary A–Z

Right-of-use asset

A right-of-use asset represents a lessee’s right to use an underlying asset for the relevant period. IFRS 16 describes recognition of the right of use and the lease liability for a lessee, subject to specified exceptions. Source: **curr-stat-ifrs16**, About.

What it represents

This is not the same as owning the premises or machine itself. The financial statements may show both a resource to use and an obligation to pay, and initial recognition does not necessarily correspond to a cash purchase of the asset. Subsequent depreciation, interest and payment describe different sides of the contract.

Limits of comparison

Do not exclude the lease debt from analysis while retaining a performance measure improved by its presentation. When comparing an owner and a lessee, align the assets, burden and cash payments. Renewal terms and the boundaries of the contract require separate review. Related reading: [financial statements roadmap](/guides/financial-statements-roadmap/) and [balance sheet](/guides/balance-sheet/).

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General educational IFRS concepts; not an individual recommendation under Russian jurisdiction.

Source reference retained: curr-stat-ifrs16, About; IFRS 16, lessee, underlying asset, lease liability, specified exceptions, ownership distinction, initial recognition, depreciation, interest, payments, lease debt, renewals and contract-boundary caveats preserved.

Educational material is not individual investment, legal or tax advice.