IASB proposes to extend support for lessees accounting for covid-19-related rent concessions

Feb 11, 2021

The International Accounting Standards Board (‘IASB’ or ‘the Board’) has published for consultation a proposal to extend by one year the application period of the amendment to IFRS 16 Leases issued in 2020 to help lessees accounting for covid-19-related rent concessions.

In publishing the consultation, the Board note that ‘the original amendment was issued in May 2020 to make it easier for lessees to account for covid-19-related rent concessions, such as rent holidays and temporary rent reductions, while continuing to provide useful information about their leases to investors. The practical relief currently applies to rent concessions that reduce only lease payments due on or before 30 June 2021.’, and that ‘in response to calls from stakeholders and because the covid-19 pandemic is still at its height, the Board proposes to extend the relief to cover rent concessions that reduce only lease payments due on or before 30 June 2022.’

Due to the urgent nature of the proposal, the Trustees of the IFRS Foundation have approved a shorter-than-normal comment period of 14 days for this consultation, with the deadline for submitting comments on the Exposure Draft (ED) being 25 February 2021.

In terms of next steps, the ED says ‘The Board will consider the comments it receives on the proposal in this Exposure Draft and will decide whether to proceed with the proposed amendment. The Board plans to complete any resulting amendment to IFRS 16 by the end of March 2021.’

The ED can be accessed here.