Standards board proposes IAS 1 and IFRS 16 changesThe IASB is consulting on a delay to an IAS 1 amendment and a change to IFRS 16 to make accounting for COVID-19-related rent concessions easier.
The International Accounting Standards Board (IASB) is proposing to delay by one year the effective date of Classification of Liabilities as Current or Non-current, which is an amendment to IAS 1, Presentation of Financial Statements. As the coronavirus crisis continues, the delay would give companies more time to prepare for the amendment, which clarifies rather than changes how to classify debt and other liabilities as current or noncurrent.
The consultation ends on 3 June.
The IAS 1 amendment was originally issued in January and was to be effective for annual reporting periods beginning on or after 1 January 2022, but the IASB proposes to delay this to 1 January 2023.
Other than its effective date, no other changes are being proposed to the IAS 1 amendment.
Lease accounting proposal
The IASB also is consulting on a proposed amendment to IFRS 16, Leases, to make it easier for lessees to account for COVID-19-related rent concessions such as rent holidays and reductions.
Currently, IFRS 16 requires lessees to assess individual lease contracts to determine whether the concessions are modifications and would therefore need the lease liability to be remeasured using a revised discount rate.
Applying that requirement to large volumes of COVID-19-related rent concessions would currently be practically difficult, so the IASB has proposed that lessees can "account for these changes as if they were not lease modifications".
The Exposure Draft COVID-19-Related Rent Concessions is open for public comment until 8 May. The proposal complements IASB's recently published IFRS 16 and COVID-19 educational materials.
For more news and reporting on the coronavirus and how management accountants can handle challenges related to the pandemic, visit FM's coronavirus resources page.
— Oliver Rowe (Oliver.Rowe@aicpa-cima.com) is an FM magazine senior editor.