Supplementary IASB meeting on COVID-19-related rent concessions

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

25 March 2021

This amendment, published by the IASB on 28 May 2020 gives lessees, and only lessees, the option to elect not to assess whether a COVID-19-related rent concession is a lease modification. Thus, the lessee would recognise the impact of the rent concession in profit or loss for the period.

Readers will recall that the exemption applies to rent concessions granted as a direct consequence of the COVID-19 pandemic that fulfil all the following conditions:

• the change results in revised consideration for the lease that is substantially the same as, or less than, the consideration for the lease immediately preceding the change;
  • the rents must have been originally due no later than 30 June 2021;
  • there is no substantive change to other terms and conditions of the lease.

The meeting, to be held in early February, will discuss whether to extend the practical relief period provided in the amendment, in light of the longer than expected crisis.

It may therefore be decided to extend the period covered by the amendment until 31 December 2021, or even 30 June 2022 (as suggested by the IASB staff). However, this would not be without some practical application difficulties, in particular because of the retroactive effect of the proposals envisaged. Rent concessions initially excluded from the scope of the amendment, applying to consideration due after 30 June 2021, may in future fall within the scope of the amendment.

At the close of this meeting, the IASB may decide to publish an exposure draft with a reduced 14-day comment period, in order to publish a definitive amendment by the end of March 2021.