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Accounting for COVID-19 related rent concessions and other modifications to lease contracts, from the lessee’s perspective
Implementing IFRS 16 Leases was a substantial task for many preparers, and COVID-19 has brought a new and unexpected source of difficulty and complexity.
The challenges posed by COVID-19 have resulted in a significant increase in the number of leases being re-negotiated or modified, usually where tenants can no longer operate, or have experienced a sudden drop in revenue. As a result, the IASB has issued a limited-scope amendment to IFRS 16 Leases to reduce the administrative burden of accounting for lease adjustments which have arisen as a direct consequence of the COVID-19 pandemic.
In this article, we explain the limited-scope amendment to IFRS 16 for modifications arising directly from COVID-19, and provide illustrative examples of how different types of modifications would be accounted for.
You can read the Accounting for Changes to Lease Contracts article here:
