One of the complex use cases in IFRS 16 is embedded lease. Good news is, it runs simple in Hamilton engine by Cognitus, simplicity is our philosophy to tackle complex requirements.
An embedded lease is an arrangement contains a lease if (1) there is an explicit or implicit identified asset in the contract, and (2) the customer controls use of the identified asset.
The next step is to allocate the contract consideration among the identified components, the lessees shall allocate the consideration payable on the basis of the relative stand-alone prices/fair values, which shall be estimated if observable are not readily available. This method is the same method as in IFRS 15 the 5-step model.