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Lease Liability in a Sale and Leaseback – International Accounting Standards Board

Date recorded:

At its meeting on May 21, 2020, the IASB discussed requirements for the transition to and early application of the proposed amendment to IFRS 16. The Board also discussed due process, including permission to begin the balloting process. With respect to transition, the Board tentatively decided to require a seller-lessee to apply the proposed amendment to IFRS 16 retrospectively in accordance with IAS 8, except when such application to lease modifications and changes in the lease term is possible only with the use of hindsight.

With respect to early application, the Board tentatively decided to permit a seller-lessee to apply the proposed amendment earlier than the effective date. With respect to due process, the Board tentatively decided to allow a comment period of no less than 120 days for the exposure draft of its proposed amendment to IFRS 16. All of the Board members confirmed they were satisfied the Board has complied with the applicable due process steps and that it should begin the balloting process for the Exposure Draft. The Board plans to publish the Exposure Draft in the third quarter of 2020.

Review the IASB Update and podcast on the Board's Web site.

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