Navigating IFRS 16 with confidence

As highlighted in the recent HFMA roundtable, NHS organisations are facing increasing complexity when it comes to leasing, driven by the accountancy changes introduced by IFRS 16. Under this new standard, all leases, with a few exceptions, must now be reported on the organisation’s balance sheet – a shift that fundamentally changes how the NHS approaches the funding of medical equipment.

Leasing has long been recognised as a flexible, efficient route to access vital resources. While the landscape has evolved, the requirement for essential equipment remains as critical as ever. At Procurement Services Leasing, we support public sector organisations to adapt to this new landscape with confidence – helping them to lease strategically, maintain compliance, and achieve long-term value.

Understanding the new pressures behind leasing decisions

The HFMA roundtable brought together NHS finance leaders to explore how IFRS 16 is reshaping leasing strategies. A recurring theme was the perceptions of leasing have shifted – not because the model is less effective, but because the rules around it have grown more complex.

Here’s what’s changing:

• Leases now count against Capital Department Expenditure Limits (CDEL), increasing pressure on already constrained capital budgets.
• Accounting treatment is significantly influencing procurement decisions, sometimes at the expense of clinical or operational priorities.
• Many organisations lack the resources and specialist expertise required to manage leases effectively throughout their full lifecycle.
• Uncertainty around the impact of new accounting rules is causing hesitancy towards leasing.

Despite these shifts, the value of leasing remains strong – especially when supported by our expert guidance.

Leasing is still an option, it just needs our expert guidance

IFRS 16 hasn’t removed the value from leasing – it has simply changed how that value needs to be planned for. Leasing continues to offer a flexible, and efficient route to obtain medical equipment without the large upfront costs.

Our team works with NHS organisations to make leasing work; they can help to:

• Develop robust business cases that align with both revenue and capital budgets.
• Navigate accounting requirements without compromising operational goals.
• Maximise value for money through compliant and sustainable lease arrangements.
• Stay in control of your leasing portfolio across it’s full lifecycle.

With expert guidance, leasing remains not only a suitable option, but essential to achieving long-term value.  Contact our Leasing Team today at psleasing@csltd.org.uk.