10 March 2021
In a supplementary meeting held earlier today, the IASB considered the feedback received on the February 2021 exposure draft 'Covid-19-Related Rent Concessions beyond 30 June 2021 (Proposed amendment to IFRS 16)' and decided to finalise the proposed extension of the May 2020 amendment that provides lessees with an exemption from assessing whether a COVID-19-related rent concession is a lease modification by one year.
During the meeting, the staff presented an analysis of the feedback received that showed that almost all respondents supported the Board's proposals in the exposure draft. The only change the staff recommended as a result of its analysis of the feedback was an additional explanatory transition paragraph.
Main points raised during the Board's discussion were the fact that IFRS 16 is not a new standard anymore so that companies should be able to comply with the requirements; the pandemic is still ongoing; there are differences in magnitude of and general situation in connection with the pandemic around the world; there is a difference between public health and economy; the lack of comparability would be continued; setting an end date to the practical relief will always be arbitrary; does there need to be an end date at all when the reference is clearly to COVID-19 related rent concessions?
When called to vote, the Board
- agreed with the conclusions the staff had drawn and decided to finalise the proposal in the exposure draft with the one additional explanatory transition paragraph proposed (10 in favour, one absent);
- agreed with with the conclusion that the amendment to IFRS 16 does not require re-exposure (12 in favour, one absent); and
- was satisfied that it has complied with the applicable due process requirements and that it has undertaken sufficient consultation and analysis to begin the balloting process for the amendment to IFRS 16 and thus gave permission to do so (12 in favour, one absent).
The same Board member that dissented from publishing the exposure draft also dissented from publishing the final amendments. In addition, one Board member who did express serious doubt when the exposure draft was published, but did not dissent then, now dissented as well.
The staff expects to finalise the amendment by the end of this month so that it can be issued on 31 March 2021 with an effective date of 1 April 2021.
In addition, see the detailed notes taken by Deloitte observers for the meeting.