06/03/2020 | News release | Distributed by Public on 06/03/2020 03:38
EFRAG has completed its due process regarding Covid-19-Related Rent Concessions (Amendment to IFRS 16) and has submitted its Endorsement Advice Letterto the European Commission.
In May 2020 the IASB issued Covid-19-Related Rent Concessions (Amendment to IFRS 16) ('the Amendment'), which was initially issued as an Exposure Draft ED/2020/2 in April 2020.
The Amendment is effective for annual reporting periods beginning on or after 1 June 2020. Earlier application is permitted, including in financial statements not yet authorised for issue at 28 May 2020.
The Amendment provides a practical expedient that permits lessees not to assess whether rent concessions that occur as a direct consequence of the covid-19 pandemic and meet specified conditions are lease modifications and, instead, to account for those rent concessions as if they were not lease modifications.
EFRAG has submitted its Endorsement Advice relating to the Amendment for use in the European Union and European Economic Area. EFRAG assesses that the Amendment meets the technical endorsement criteria of the IAS Regulation and is conducive to the European public good. It therefore recommends its endorsement. EFRAG's recommendation can be found in the letter to the European Commission and the accompanying appendices.