April2020
IFRS®Standards
ExposureDraftED/2020/2
Covid-19-RelatedRentConcessions
ProposedamendmenttoIFRS16
Commentstobereceivedby8May2020
ExposureDraft
Covid-19-RelatedRentConcessions
ProposedamendmenttoIFRS16
Commentstobereceivedby8May2020
ExposureDraftED/2020/2Covid-19-RelatedRetCocessiosispublishedbytheInternational
AccountingStandardsBoard(Board)tsneedtobereceivedby8May2020
andshouldbesubmittedbyemailtocommentletters@nlineat/
projects/open-for-comment/.
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EXPOSUREDRAFT—APRIL2020
COTETS
ITRODUCTIO
IVITATIOTOCOMMET
[DRAFT]AMEDMETTOIFRS16LEASES
APPROVALBYTHEBOARDOFEXPOSUREDRAFTCOVID-19-RELATED
RETCOCESSIOSPUBLISHEDIAPRIL2020
BASISFORCOCLUSIOSOTHEEXPOSUREDRAFT
©IFRSFoundation
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COVID-19-RELATEDRETCOCESSIOS—PROPOSEDAMEDMETTOIFRS16
Introduction
WhyistheBoardpublishingthisExposureDraft?
TheInternationalAccountingStandardsBoard(Board)hasbeeninformedthatmany
lessorsaroundtheworldhaveprovided,orareexpectedtoprovide,rentconcessionsto
ntconcessionsareparticularly
prevalentforleasesofretailpropertyand,insomecases,areencouragedorrequiredby
ncessionsincluderentholidaysorrent
reductionsforaperiodoftime,possiblyfollowedbyincreasedrentpaymentsinfuture
periods.
IFRS16Leasescontainsrequirementsthatspecifytheaccountingforchangesinlease
payments,r,theBoardhasbeeninformedthat
applyingthoserequirementstoapotentiallylargevolumeofcovid-19-relatedrent
concessionscouldbepracticallydifficult,especiallyinthelightofthemanychallenges
icular,lesseeshaveidentifiedpotential
difficultiesinthecurrentenvironmentinassessingwhethercovid-19-relatedrent
concessionsareleasemodificationsand,forthosethatare,applyingtherequired
accounting.
Inaddition,manylesseesarecurrentlypreparingtheirfirstannualfinancialstatements
plexityarisingasaresultofthecovid-19pandemictherefore
addstotheworkbeingundertakeninimplementingthenewlesseeaccountingmodelin
IFRS16.
TheobjectiveoftheproposalinthisExposureDraftistoprovidelesseeswithpractical
reliefduringthecovid-19pandemicwhileenablingthemtocontinueprovidinguseful
informationabouttheirleasestousersoffinancialstatements.
ProposalinthisExposureDraft
TheExposureDraftproposesanamendmenttoIFRS16topermitlessees,asapractical
expedient,nottoassesswhetherparticularcovid-19-relatedrentconcessionsarelease
d,lesseesthatapplythepracticalexpedientwouldaccountforthose
osureDraftproposesno
changeforlessors.
Whowouldbeaffectedbytheproposal?
TheproposalinthisExposureDraftwouldaffectlesseesthataregrantedrentconcessions
asadirectconsequenceofthecovid-19pandemicduring2020,andusersoftheselessees’
financialstatements.
extstep
TheBoardwillconsiderthecommentsthatitreceivesontheproposalinthisExposure
rdplans
tocompleteanyresultingamendmenttoIFRS16bytheendofMay2020.
4©IFRSFoundation
EXPOSUREDRAFT—APRIL2020
Invitationtocomment
TheBoardinvitescommentsontheproposalinthisExposureDraft,particularlyonthe
tsaremosthelpfulifthey:
(a)
(b)
(c)
(d)
(e)
addressthequestionsasstated;
indicatethespecificparagraph(s)towhichtheyrelate;
containaclearrationale;
identifyanywordingintheproposalthatisdifficulttotranslate;and
includeanyalternativetheBoardshouldconsider,ifapplicable.
TheBoardisrequestingcommentsonlyonmattersaddressedinthisExposureDraft.
Questionsforrespondents
Question1—Practicalexpedient(paragraphs46Aand46Bofthe[Draft]amendment
toIFRS16)
Paragraph46AofthedraftamendmenttoIFRS16proposes,asapracticalexpedient,
thatalesseemayelectnottoassesswhetheracovid-19-relatedrentconcessionisa
ethatmakesthiselectionwouldaccountforanychangein
leasepaymentsresultingfromthecovid-19-relatedrentconcessionthesamewayit
wouldaccountforthechangeapplyingIFRS16ifthechangewerenotalease
modification.
Paragraph46BofthedraftamendmenttoIFRS16proposesthatthepracticalexpedient
appliesonlytorentconcessionsoccurringasadirectconsequenceofthecovid-19
pandemicandonlyifallofthefollowingconditionsaremet:
(a)thechangeinleasepaymentsresultsinrevisedconsiderationfortheleasethat