15 May 2020
In a supplementary meeting today, the IASB considered the feedback it received on its 24 April exposure draft 'Covid-19-Related Rent Concessions (Proposed amendment to IFRS 16)' that contained a proposed amendment that would provide lessees with an exemption from assessing whether a COVID-19-related rent concession is a lease modification. The 14-day comment letter period closed on 8 May 2020 and the Board received 110 comment letters (including late submissions).
Deviating slightly from the original proposal but not changing the core practical relief, the Board decided to allow the expedient to be applied to COVID-19-related rent concessions to payments originally due on or before 30 June 2021. The Board also decided to require disclosure of the amount recognised in profit or loss to reflect changes in lease payments that arise from COVID-19-related rent concessions. Finally, the Board decided that in the reporting period in which a lessee first applies the amendment, it is not required to disclose the quantitative information required by paragraph 28(f) of IAS 8. All decisions were supported by 13 Board members.
The amendment will have an effective date of 1 June 2020 with early application permitted. Despite the wording "annual reporting periods" the amendment would also be available for interim reports.
For lessors, the Board decided take no further action. It argued that as many entities face significant challenges at the moment, there needs to be sufficient reason to undertake standard-setting, which the Board did not see enough evidence for. This decision was supported by all 14 Board members.
The Board did not see a need for re-exposure and no Board member intends to dissent from the issuance of the amendment. The Board is satisfied that it has complied with the applicable due process requirements and gave permission to begin the balloting process for the amendment. These decisions were supported by all 14 Board members. The staff expect issuing a final amendment on or around 28 May 2020.
Please click to access the detailed notes taken by Deloitte observers.