The International Accounting Standards Board (IASB) has extended by one year “the application period of the practical expedient in IFRS 16, Leases, to help lessees accounting for COVID-19-related rent concessions”.
The move announced Wednesday — in response to stakeholder requests and because the COVID-19 pandemic has not ended — means the relief is extended by one year to cover rent concessions that reduce only lease payments due on or before 30 June 2022, the board said.
The IASB issued the original amendment in May to make it easier for lessees to account for COVID-19-related rent concessions, such as rent holidays and temporary rent reductions, while continuing to provide useful information about their leases to investors.
The new amendment — COVID-19-Related Rent Concessions Beyond 30 June 2021: Amendment to IFRS 16 (IASB free, basic account login required) — is effective for annual reporting periods beginning on or after 1 April 2021.
— Oliver Rowe (Oliver.Rowe@aicpa-cima.com) is an FM magazine senior editor.