IFRS 16 Lease Calculator
France

IFRS 16 in France: IFRS 16 (EU-endorsed)

France adopted IFRS 16 through EU endorsement for listed companies and their consolidated groups. French entities reporting under Plan Comptable Général (PCG) — the French national accounting standard — do not apply IFRS 16; instead, they follow national rules where operating and finance lease distinctions remain. The Autorité des Marchés Financiers (AMF) supervises financial reporting by listed entities, while the Haut Conseil du Commissariat aux Comptes (H3C) oversees audit quality. The Autorité des Normes Comptables (ANC) is responsible for national accounting standards and participates in IASB discussions.

Regulatory context: Autorité des Marchés Financiers (AMF) / Haut Conseil du Commissariat aux Comptes (H3C)

The AMF has included IFRS 16 in its annual thematic review priorities since the standard's effective date. Key AMF observations include: need for improved disclosure of key assumptions (particularly the IBR), insufficient explanation of the impact on alternative performance measures (APMs), and the need for clear reconciliation between IFRS 16 lease liabilities and off-balance-sheet commitments. The H3C's inspection findings for statutory auditors (commissaires aux comptes) have highlighted insufficient challenge of management's lease term assessments and IBR determinations.

Practical guidance for France

For French entities, the IBR should reference French and Eurozone market conditions — OAT (Obligations Assimilables du Trésor) yields for the risk-free component, plus entity-specific credit spreads. French commercial lease law (bail commercial, Code de Commerce Articles L145-1 et seq.) provides significant tenant protections including the right to renewal (droit au renouvellement) for commercial leases of at least 9 years and the right to an eviction indemnity (indemnité d'éviction) if renewal is refused. These statutory protections may make lease extensions reasonably certain under IFRS 16, extending the accounting lease term beyond the initial contractual period.

Audit expectations

French statutory auditors (commissaires aux comptes) follow ISA as adopted in the EU, supplemented by French professional standards issued by the H3C and the CNCC (Compagnie Nationale des Commissaires aux Comptes). The H3C's inspection programme has focused on the audit of IFRS 16 estimates, with findings including: failure to independently verify the IBR, inadequate testing of lease completeness, and insufficient documentation of the auditor's assessment of extension option judgments.

France-specific considerations

The French 3-6-9 commercial lease structure (bail 3-6-9) — where the standard commercial lease runs for 9 years with the tenant having the right to terminate at 3-year intervals — creates specific IFRS 16 lease term considerations. The default lease term is 9 years, but the tenant's right to break at years 3 and 6 requires assessment of whether the tenant is reasonably certain NOT to exercise these break options. Factors include the entity's investment in the premises, the strategic importance of the location, and historical break option exercise patterns.

Common inspection findings

IBR not independently tested — auditors accepted management's rate without market data verification

Bail commercial 3-6-9 structure not analysed for break clause exercise likelihood

Embedded leases in facility management and fleet contracts not identified

AMF APM guidelines not fully addressed in disclosure review

Lease modification accounting for COVID-era rent reductions not consistently applied