In the context of IFRS 16, a Short Term Lease refers to leases that have a fixed lease term of 12 months or less from the start of the lease. Additionally, these leases do not include a purchase option for the asset being leased. Short term leases offer a simplified accounting treatment, as organizations can elect not to recognize the leased asset and liability on the balance sheet. Instead, lease payments for such leases are simply recognized as an expense in the income statement as they become due. This treatment reduces the administrative complexity associated with full IFRS 16 compliance for long-term leases.\n\nFor example, renting office equipment for a period of six months under a lease agreement is a typical scenario for a short term lease under IFRS 16. Since the lease term is within the short term lease criteria and there is no purchase option with the lease, the lessee can treat the lease payments as expenses directly, simplifying accounting.\n\nTo comply with IFRS 16, businesses must disclose their use of exemptions related to short term leases in their financial statements.