The COVID-19 pandemic has led many businesses to negotiate for lease deductions. In light of these circumstances, the International Accounting Standards Board has issued an amendment to IFRS 16 Leases to assist lessees in accounting for COVID-19 related rent concessions such as rent holidays and temporary rent deductions.
This amendment allows lessees, as a practical expedient, to account for such rent concessions as if they were not lease modifications. It applies to COVID-19 related rent concessions that reduce lease payments due on or before 30 June 2021.
The amendment is effective from 1 June 2020 but earlier adoption of this practical expedient is allowed.
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