ICAI NewsExposure Draft on COVID-19-Related Rent Concessions (Proposed amendment to IFRS 16, Leases) – (26-04-2020)
As a result of the deadly Covid-19 pandemic, many lessors around the world have provided, or are expected to provide, rent concessions to lessees, as a relief. Such rent concessions are particularly prevalent for leases of retail property and, in some cases, are encouraged or required by governments or jurisdictional authorities. The Exposure Draft proposes an amendment to IFRS 16 to provide lessees with practical relief during the COVID-19 pandemic while enabling them to continue providing useful information about their leases to users of financial statements.
|Any complexity arising as a result of the Covid-19 pandemic adds to the work being undertaken in implementing the new lessee accounting model in IFRS 16. Therefore, the proposed amendment aims to address issues affecting the application of IFRS 16 requirements to large volumes of rent concessions granted as a direct consequence of the COVID-19 pandemic during 2020. The proposed amendment:|
permits lessees, as a practical expedient, not to assess whether particular COVID-19-related rent concessions are lease modifications. Instead, lessees that apply the practical expedient would account for those rent concessions as if they did not lease modifications.
requires lessees that apply the practical expedient to disclose that fact.
The Exposure Draft proposes no change for lessors.
In addition to the specific questions asked in the Exposure Draft, stakeholders are requested to respond to the below question with regard to the relevance of the proposals of the ED in the Indian context:
Additional Question: It is important to note that proposed amendments are applicable for COVID 19 related rent concession only, from annual reporting periods beginning on or after 1 June 2020, thereby restricting its applicability for a very short period. In view of this, stakeholders are requested to state that whether in the Indian context, Ind AS 116, Leases, shall be revised or not based on the final amendments to be issued by the IASB.
How to comment
The downloadable version of the Exposure Draft can be accessed at the following link: https://resource.cdn.icai.org/59136asb48246.pdf
Comments should be submitted using one of the following methods, so as to be received no later than May 05, 2020:
|1. Electronically:||Visit at the following link (Preferred method):|
|2. Email:||Comments can be sent to firstname.lastname@example.org|