02/04/2021 - EFRAG's Endorsement Advice on Covid-19-Related Rent Concessions beyond 30 June 2021 (Amendment to IFRS 16)
EFRAG has completed its due process regarding Covid-19-Related Rent Concessions beyond 30 June 2021 (Amendment to IFRS 16) and has submitted its Endorsement Advice Letter to the European Commission.
On 31 March 2021, the IASB issued Covid-19-Related Rent Concessions beyond 30 June 2021 (Amendment to IFRS 16) ('the Amendment'), which was initially issued as an Exposure Draft ED/2021/2 on 11 February 2021.
The Amendment increases the scope of Covid-19-Related Rent Concessions (Amendment to IFRS 16) ('the 2020 Amendment') that was issued on 28 May 2020, which 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. The Amendment increases the eligibility period for the application of the practical expedient by 12 months from 30 June 2021 to 30 June 2022.
The Amendment is effective for annual reporting periods beginning on or after 1 April 2021. Earlier application is permitted, including in financial statements not yet authorised for issue at 31 March 2021.
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.
