ASCG comments on IASB ED/2020/4 Lease Liability in a Sale and Leaseback

Today, the ASCG submitted its comment letter on the IASB ED/2020/4 Lease Liability in a Sale and Leaseback.

The proposals of the IASB are not supported by the ASCG. Instead, discussing this topic in the context of the upcoming post-implementation review (PiR) of IFRS 16 is deemed to be more sensible.

However, if the IASB, due to the incomplete requirements of the standard and the diversity in practice identified, intends to provide a solution (possibly only in the short term) before the PiR, it should be significantly simpler than the proposals of the ED.

As an alternative, the ASCG proposes the deferral of the profit attributable to the retained interest in the right-of-use asset over the expected term of the leaseback.