ASCG supports amendment to IFRS 16 to extend relief for Covid-19-Related Rent Concessions

The ASCG has commented on the IASB’s ED/2021/2 Covid-19-Related Rent Concessions beyond 30 June 2021, issued on 11 February 2021 (ASCG comment letter).

In accordance with the support of the IASB´s original amendment Covid-19-Related Rent Concessions, issued by the IASB in May 2020, the ASCG thinks that extending the availability of this exemption by 12 months, from 30 June 2021 to 30 June 2022, is (a) a pragmatic solution to the ongoing accounting challenges lessees are facing and, considering the extended period of observable Covid-19-related rent concessions, (b) consistent with what the Board had in mind when it developed the practical expedient in May 2020. Extending the availability of this exemption to 30 June 2022 is deemed to be an appropriate and necessary compromise to take into account the uncertainty as to the length and the severity of the ongoing Covid-19 pandemic.

Additionally, the we agree with the proposed effective date and the proposed transition requirements in principle, but have some additional remarks on issues that also concern transition, i.e. the interaction of the 2020 amendment with the current proposals.