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Accounting for rent concessions as a result of the COVID-19 pandemic – AcSB

Date recorded:

At its meeting on October 7, 2020, the AcSB deliberated stakeholders’ feedback on the Exposure Draft, “Leases.” Respondents generally supported the underlying principles in the Exposure Draft. The Board decided, subject to written ballot, to:

  1. clarify that any rent concession that results in reduced lease payments must relate to payments that were originally due on or before December 31, 2021;
  2. clarify that the condition to use the relief would still be met for deferrals of lease payments originally due before December 31, 2021, but are repaid after December 31, 2021; and
  3. add a requirement to disclose the fact and the reasons for not applying the relief to all leases that meet the conditions of the practical expedient.

The AcSB recognizes the importance of this topic and is currently in the process of balloting. The Board plans to issue the final amendments in the first week of November 2020. The amendments apply to annual financial statements ending on or after December 31, 2020, with earlier application permitted, including in financial statements not yet authorized for issue.

Review the Executive Summary on the AcSB's Web site.

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