Draft on Covid-19-related rent concessions

Keywords: Mazars, Thailand, IFRS, IASB, COVID-19, IFRS 16, Rent concessions

08 April 2021

This is available here.

The exposure draft proposes that the practical expedient permitted by paragraph 46A of the standard should be extended to cover concessions on lease payments due up to 30 June 2022 (instead of 30 June 2021 as currently).

The amendment would be applicable retrospectively and the cumulative impact would be recognised as an adjustment to the opening balance of retained earnings (or other component of equity, where appropriate) for the period in which the amendment is first applied.

The IASB also proposes in the exposure draft that:

• a lessee that has already applied the practical expedient in paragraph 46A to concessions on lease payments due up to 30 June 2021 (the original end date) must also apply it to concessions on lease payments due up to 30 June 2022;
• a lessee that has previously elected not to apply the practical expedient to concessions on lease payments due up to 30 June 2021 is not permitted to apply it to concessions granted after this date on lease payments due up to 30 June 2022;
• a lessee that has not yet decided on whether or not to apply the practical expedient may decide to apply the amended version retrospectively to all contracts with similar characteristics and circumstances.

The IASB proposes that the amendment should be applicable for financial periods commencing on or after 1 April 2021 and that early application should be permitted, including for financial statements not yet authorised for issue at the publication date of the amendment.

The comment period for the amendment was shorter than usual and ended on 25 February 2021. The final version of the amendment is expected to be published by the end of March.