IASB ED/2021/2

  • For-profit

Covid-19-Related Rent Concessions beyond 30 June 2021 (Proposed amendment to IFRS 16)

The International Accounting Standards Board (IASB) has recently issued for comment Exposure Draft 2021/2, Covid-19-Related Rent Concessions beyond 30 June 2021 (the ED).


In June 2020, the IASB issued the amending standard Covid-19-Related Rent Concessions. This standard amended IFRS 16 Leases to make it easier for lessees to account for COVID-19-related rent concessions, such as rent holidays and temporary rent reductions – while still enabling lessees to provide useful information about their leases to investors.

The amendment exempted lessees from having to consider whether particular COVID-19-related rent concessions were lease modifications, allowing them to account for these changes as if they were not lease modifications. In other words it allowed lessees to reflect the rent concessions by directly reducing the value of associated lease liability and right-of-use asset rather than completing the more complex assessment required for a lease modification. The amendment applied to COVID-19-related rent concessions that reduce lease payments due on or before 30 June 2021.

The ED

As a result of the ongoing impact of the COVID-19 pandemic, it has become clear that rent concessions are being offered beyond the originally expected date of 30 June 2021. The ED proposes to extend the time period for which lessees can apply the practical expedient to capture any reduction in lease payments originally due on or before 30 June 2022. 

The IASB has responded quickly to provide support to stakeholders at this difficult time. Accordingly, the comment period on the proposal is short – 14 days. The IASB aims to issue the final amendment, which would be available to lessees immediately, in March 2021.

The XRB Board is committed to adopting international standards in the for-profit sector. Generally, once a standard has been issued by the IASB, the NZASB then issues the New Zealand equivalent standard without further consultation. 

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