Covid-19: amendment to IFRS 16 Leases

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Pat Sweet

(Accountancy Daily) – The International Accounting Standards Board (IASB) has announced a snap two-week consultation on proposals to amend IFRS 16 Leases to make it easier for lessees to account for Covid-19-related rent concessions such as rent holidays and temporary rent reductions

The aim of the amendment is to give timely relief to lessees when applying IFRS 16 to Covid-19-related rent concessions, while still enabling them to provide useful information about their leases to investors.

The current pandemic has led some lessors providing relief to lessees by deferring or relieving them of amounts that would otherwise be payable. Sometimes this is the result of individual negotiations, but in many of the jurisdictions in which IFRS apply, governments are encouraging or requiring such relief. بديل الروليت الباى بال

IFRS 16 specifies how lessees should account for changes in lease payments, including concessions. However, applying those requirements to a potentially large volume of Covid-19-related rent concessions could be practically difficult, especially in the light of the many challenges stakeholders face during the pandemic, IASB says. موعد انطلاق يورو 2023

In addition, many lessees are currently preparing their first annual financial statements applying IFRS 16. Any complexity arising as a result of the Covid-19 pandemic therefore adds to the work being undertaken in implementing the new lessee accounting model in IFRS 16.

The standard requires lessees to assess individual lease contracts to determine whether the concessions are to be considered lease modifications and, if that is the case, the lessee must remeasure the lease liability using a revised discount rate.

The proposed amendment would exempt lessees from having to consider whether particular Covid-19-related rent concessions are lease modifications, allowing them to account for these changes as if they were not lease modifications.

The amendment would apply to Covid-19-related rent concessions that reduce lease payments due in 2020.

Following the 14-day consultation, the Board aims to issue the final amendment, which would be available to lessees immediately, in May 2020. The effective date of the amendment will be 1 June 2020. كيف احصل على المال العاب مصراوى طاوله 31

The exposure draft is open for comment until 8 May. مسابقات لربح المال مجانا

In addition, IASB has published educational materials outlining the issues regarding IFRS 16 and Covid-19.

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