21/07/2015 - EFRAG, the IASB and the National Standard Setters AAT, ANC, ASCG, FRC and OIC invite companies to participate in a public survey on impact of the forthcoming new IFRS on Leases on financial covenants in loan agreements

The IASB has completed its redeliberations in regard to the proposed new lease accounting requirements. The new IFRS on Leases is expected to be issued before the end of 2015. It will require lessees to recognise assets and liabilities for all identified leases. The amount of newly recognised lease liabilities is expected to be significant for many entities. Therefore, questions have been raised about the possible impact of the new IFRS on financial covenants in loan agreements that refer to measures of debt, net financial position or similar indicators.EFRAG, the IASB and the National Standard Setters are performing this public survey to acquire quantitative and qualitative information about how covenants are determined in Europe.

What is the objective of this public survey?

The objective of this survey is twofold. The first objective is to assess the possible impact of the new IFRS on Leases on lenders' business practices. Financial institutions who participate in the survey will have the opportunity to increase their awareness of the effects of the new IFRS on financial covenants applied to their customers' loan agreements, possibly resulting in reducing the cost of implementing the new IFRS for them and their customers.

The second objective is to better understand the extent to which covenants are based on figures reported in accordance with IFRS.

When and how will this field-test be conducted?

This public survey will start on 22 July 2015. The participants are requested to answer the survey questions and submit their replies not later than on Wednesday, 30 September 2015.

A feedback statement will be issued so as to share the results of the public survey, whilst the individual responses will remain confidential.

How to participate?

EFRAG and the National Standard Setters invite all entities to participate in this public survey.

A link to the copy of questionnaire is provided below. You can also obtain it by contacting the National Standard Setter in your jurisdiction, as indicated in the table below, or EFRAG.

Country	Contact	Contact name	Phone number	E-mail address
	IASB	Patrina Buchanan	+44(0)2072466468	pbuchanan@ifrs.org
	EFRAG	Robert Stojek	+32(0)2-2104404	robert.stojek@efrag.org
France	ANC	Angélique Courtade-Benlian	+33(0)1-53442983	angelique.courtade-benlian@anc.gouv.fr
Germany	DRSC	Peter Zimniok	+49(0)30-206412-19	zimniok@drsc.de
Italy	OIC	Federica Girolami	+39/06/69766835	fgirolami@fondazioneoic.it
Lithuania	AAT	Kristina Volodkovic	+370-5 212 5464	k.volodkovic@aat.lt
UK	UK FRC	Annette Davis	+44(0)2074922322	A.Davis@frc.org.uk

Related project: IFRS 16 Leases
Attachment(s):
Leases_-_Additional_public_consultation_on_financial_covenants.docx