IFRS 16 does not specify a set frequency for updating the Incremental Borrowing Rate (IBR). According to Appendix A, Defined Terms, the IBR is defined as: “The rate of interest that a lessee would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment.”
Paragraphs 26, 41, and 43 suggest that the IBR should be determined at the lease commencement date, or when there is a lease modification or remeasurement. This rate should reflect the interest rate for a similar term, security, asset value, and economic environment.
To reduce the need for frequent recalculations, you could document the stability of the economic environment and the parameters used in your IBR calculations.
In periods of higher market volatility, it might be prudent to update the IBR at least twice a year or more frequently, depending on your reporting requirements. In contrast, during times of low market volatility, an annual update may suffice.
Ultimately, this decision requires professional judgment tailored to your company’s specific situation and should be agreed upon with your auditor.