IASB proposes short-term amendment to IFRS 16 Leases regarding lessee-accounting for rent concessions in the context of the coronavirus pandemic

The IASB has published ED/2020/2 Covid-19-Related Rent Concessions on 24 April 2020 (further information).

Against the background of rent concessions currently observable in many countries, IFRS 16 is to be amended to grant lessees an exemption, limited to 2020, from the assessment of whether a rent concession relating to the coronavirus pandemic is to be classified as a lease modification. The application of this optional exemption results in accounting for these rent concessions as if they were not a modification of the lease. This eliminates the need for the reporting entity to review all leases, to make a legal assessment of the rent concession against the background of the respective contract clauses and to revise discount rates.

In order to complete the standardsetting-process on a timely basis (by the end of May if possible), the Board set a comment period of only 14 days for the Exposure Draft.  Feedback can be submitted until 8 May 2020.

Note: No changes to the accounting of lessors are intended.