Healthcare organisations in Australia manage some of the most diverse lease portfolios of any sector: long-term hospital and specialist centre leases, high-value medical equipment such as MRI and CT machines, patient transport fleets, and a steady volume of short-term and low-value assets that each require a policy decision under AASB 16. LOIS is a purpose-built lease accounting and management platform designed to handle exactly this complexity, bringing finance, property, and fleet together in a single, unified system with full AASB 16 compliance, automated calculations, complete audit trails, and a managed service option for teams without a dedicated lease accounting resource.
Healthcare organisations from private hospital networks to not-for-profit community health providers use LOIS to move off spreadsheets, centralise lease data, and produce audit-ready outputs every month. Updated April 2026.
Most sectors deal with one or two dominant lease types. Healthcare organisations routinely manage five at once, each with different lease terms, modification triggers, and accounting treatment decisions under AASB 16. The result is a portfolio that is harder to centralise, harder to keep compliant, and harder to audit than almost any other sector.
Hospitals, specialist medical centres, day surgery facilities, and aged care sites typically run on 10 to 20-year leases, often with CPI rent review clauses and complex option structures. These are the largest items on the balance sheet and the ones where a missed review date or incorrect modification treatment has the most material impact.
MRI scanners, CT machines, surgical robots, ultrasound systems, and pathology lab equipment are typically leased rather than purchased outright. These assets carry significant balance sheet value and frequently include mid-term upgrade options, creating modification events that must be correctly remeasured and tracked under AASB 16.
Hospital networks, ambulance services, and community health providers manage fleets of transport vehicles from multiple providers, each sending data in a different format. Processing these leases accurately at scale under AASB 16 requires automated bulk upload and validation tools, not manual entry.
Clinical environments contain a high proportion of assets that sit near the AASB 16 low-value threshold: patient monitoring equipment, infusion pumps, portable devices, and IT hardware. Each requires a consistent policy decision, and that consistency needs to be documented and defensible for external auditors.
Healthcare routinely bundles equipment use inside service contracts: managed pathology services, equipment maintenance agreements, outsourced sterilisation, and diagnostic service arrangements. Each must be assessed under the AASB 16 identification criteria to determine whether a lease exists within the contract, adding a layer of complexity that most generic tools do not support.
AASB 16 is Australia's adoption of IFRS 16, which required for-profit entities to bring operating leases onto the balance sheet from 1 January 2019. For healthcare organisations, the impact reaches further than for most sectors, for three reasons.
Bringing MRI machines, CT scanners, and other high-value equipment on-balance-sheet increases both total assets and total liabilities. For healthcare organisations that rely on bank lending, government funding allocations, or bond covenants, these ratio changes matter. Debt-to-equity, asset coverage, and EBITDA metrics all shift. Finance teams need software that produces accurate, auditable AASB 16 outputs so those ratios can be confidently presented to lenders, boards, and funders.
Public hospital networks, community health services, and not-for-profit providers operate under AASB 16 alongside AASB 1060 (General Purpose Financial Statements for Tier 2 entities) and state Treasury reporting requirements. These entities face additional disclosure obligations and are often subject to annual government audit, meaning the standard for audit-readiness is higher than in the private sector. A full, timestamped audit trail for every lease modification is not optional for these organisations.
Healthcare technology evolves rapidly. A hospital that leased a 1.5T MRI scanner in 2021 may upgrade to a 3T machine before the original lease ends. That upgrade is a lease modification under AASB 16, requiring a remeasurement of the right-of-use asset and lease liability, a new incremental borrowing rate assessment, and updated journal entries. Healthcare finance teams managing multiple pieces of high-value diagnostic equipment will encounter these modification events regularly, and they need a system that handles them correctly and automatically.
These challenges come up consistently when talking to finance teams at healthcare organisations in Australia. They are structural problems, not process problems, which means they cannot be solved by working harder or adding another spreadsheet tab.
In most healthcare organisations, clinical departments source their own equipment, facilities management handles property leases, and the fleet team manages transport vehicles. Finance sits downstream, trying to pull a compliant AASB 16 position together from data controlled by three different teams who each track things differently. Without a central register that all teams feed into, the finance team is always chasing, always reconciling, and always at risk of missing something material. For more on this structural problem, our post on how finance and property teams collaborate on IFRS 16 covers the specific friction points.
When a lease modification occurs (an equipment upgrade, a scope change on a diagnostic service contract, or an extension to a clinical space lease), the correct accounting treatment depends on the nature of the modification. AASB 16 has different requirements for a lease that becomes larger (treated as a new lease), a lease that becomes smaller (remeasure with a gain or loss), and other modifications (remeasure at a revised discount rate). Applying these treatments correctly and consistently in a spreadsheet across multiple simultaneous modification events is genuinely difficult, and errors are common. Our AASB 16 audit preparation checklist covers what auditors specifically look for when reviewing modification accounting.
The AASB 16 assessment of whether a contract contains a lease depends on whether the customer controls the use of an identified asset for a period of time. In healthcare, this gets complicated: a managed pathology service may or may not contain a lease depending on how the contract is structured, who controls the equipment scheduling, and whether substitution rights exist. Getting this wrong means either over-reporting lease liabilities (if you include contracts that are genuinely services) or under-reporting them (if you exclude contracts that are actually leases). This is an area where CA-qualified expertise is not a luxury.
Many healthcare finance teams are not large. A regional hospital network with 50 property leases, 30 equipment leases, and a fleet of 80 vehicles has well over 160 lease records to maintain, modify, and report on each month. For a finance team that also handles payroll, accounts payable, statutory reporting, and a dozen other obligations, managing this under AASB 16 without dedicated software or expert support is an ongoing risk. A managed service option (where CA-qualified accountants handle data validation, calculations, and monthly reporting on behalf of the organisation) is particularly relevant here.
Healthcare organisations evaluating lease accounting software should prioritise these capabilities. The brief matters: a platform that works well for a single asset class, or for a smaller private company, may not be adequate for a healthcare organisation managing diverse lease types with public accountability.
LOIS is used by healthcare organisations across Australia and New Zealand to manage lease portfolios that span property, equipment, and fleet. The platform is built and supported by CA-qualified lease accounting experts, which means the capabilities reflect how AASB 16 actually works in practice, not just how it reads in theory. Here is what that looks like for healthcare teams.
LOIS handles property, equipment, and fleet leases within a single system. A healthcare organisation does not need separate tools for its hospital building leases, its diagnostic imaging equipment, and its patient transport fleet. All asset classes are managed together, with AASB 16 calculations applied consistently, and a single source of truth that finance, property, and clinical procurement teams can all access. See the full LOIS lease accounting platform and the LOIS property management module.
LOIS automates the AASB 16 calculations that healthcare finance teams find most time-consuming and error-prone: right-of-use asset and lease liability recognition at commencement, amortisation and depreciation schedules, lease modification remeasurement, and general ledger journal preparation. Every change in the system is timestamped and logged, creating a complete audit trail that is ready for external auditors without additional preparation. For public and not-for-profit healthcare entities, this is particularly important given the standard of documentation required under government audit frameworks.
LOIS has alerts for critical lease events: rent reviews, expiry dates, option exercise windows, and CPI adjustment dates. For a healthcare property team managing a portfolio of hospital sites and specialist centre leases across multiple states, missing a rent review or failing to exercise a lease option at the right time has real financial consequences. LOIS creates a proactive workflow so nothing falls through the gaps, and both finance and property teams are working from the same data. See how the LOIS property management module supports this.
For healthcare organisations that do not have a dedicated lease accounting resource, the LOIS Managed Service combines the platform with CA-qualified specialists who validate all lease data, run the AASB 16 calculations, prepare journal entries, and deliver a fully reconciled, audit-ready reporting pack every month. The finance team retains full visibility and control, without needing to build internal lease accounting expertise from scratch. Our post on what a managed service lease accounting arrangement involves explains the model in detail.
Patient transport fleets present a specific data challenge: multiple providers, multiple formats, high volume, and frequent changes. LOIS's fleet management module accepts lease data from any provider format, automatically cross-checks it against existing records, and identifies new leases, price changes, CPI adjustments, extensions, and terminations. For a hospital network running a large ambulance or patient transport fleet, this eliminates the manual processing that makes month-end close harder than it needs to be. See LOIS fleet management and our post on managing fleet leases under IFRS 16.
LOIS manages over AUD 54.8 billion in lease assets
Across 300+ organisations, from community health providers to large hospital networks and enterprise healthcare groups, managing portfolios from 30 leases to over 10,000.
Yes. Not-for-profit (NFP) healthcare organisations that are Tier 1 or Tier 2 reporting entities under the AASB framework are required to apply AASB 16, or its equivalent for public benefit entities. Public hospital networks and large NFP health providers are also subject to state Treasury reporting requirements and government audit, which typically require a higher standard of audit documentation and disclosure than private-sector entities face.
High-value medical equipment leases are treated as finance leases under AASB 16 in most cases, meaning the right-of-use asset and lease liability must be recognised on the balance sheet at commencement. If the equipment is subsequently upgraded during the lease term, this constitutes a lease modification under AASB 16 and requires remeasurement of both the asset and the liability, with specific accounting treatment depending on whether the modification increases or decreases the scope of the original lease.
Yes. Any contract that gives a healthcare organisation the right to control the use of an identified asset for a period of time must be assessed under AASB 16 to determine whether it contains a lease. Pathology service contracts, equipment maintenance agreements, and outsourced diagnostic service arrangements often include the use of specific equipment and must be evaluated on their individual terms.
Yes. LOIS is a unified platform that handles property, equipment, and fleet leases within a single system. A healthcare organisation can manage its hospital building leases, diagnostic imaging equipment, and patient transport vehicles from the same platform, with AASB 16 calculations applied consistently across all asset types.
The LOIS Managed Service combines the LOIS platform with CA-qualified lease accounting specialists who validate lease data, run AASB 16 calculations, prepare journal entries, and deliver monthly audit-ready reporting packs on behalf of the organisation. It is particularly well suited to healthcare finance teams managing complex, multi-asset-class portfolios where dedicated internal resource for lease accounting is not available.