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Leases – Accounting for rent concessions as a result of the COVID-19 pandemic (Further amendments to Section 3065) [Completed]

Ef­fec­tive date:

The amend­ments will ap­ply to an­nual fi­nan­cial state­ments end­ing on or af­ter De­cem­ber 31, 2021, with ear­lier ap­pli­ca­tion per­mit­ted, in­clud­ing in fi­nan­cial state­ments not yet au­tho­rized for is­sue.

Last updated:

December 2021


As a re­sult of the COVID-19 pan­demic, many en­ter­prises are re­ceiv­ing rent con­ces­sions. This in­cludes lease pay­ment de­fer­rals or pay­ment for­give­ness, or they are rene­go­ti­at­ing lease terms.

Sec­tion 3065Leases pro­vides guid­ance on ac­count­ing for changes in the pro­vi­sions of an ex­ist­ing lease and re­quires that any such changes be ac­counted for as a new lease (i.e. a lease mod­i­fi­ca­tion). This could be oner­ous for pri­vate en­ter­prises with many leases if all rent con­ces­sions needed to be ac­counted for as new leases. Ac­cord­ingly, the AcSB de­cided to amend Sec­tion 3065 to pro­vide re­lief for both lessees and lessors on ac­count­ing for rent con­ces­sions as a re­sult of the COVID-19 pan­demic.

In November 2020, the AcSB amended Section 3065, Leases to provide an option for both lessees and lessors to not account for COVID-19-related lease modifications as new leases. The existing relief is limited to lease payments originally due on or before December 31, 2021.

On June 30, 2021, in re­sponse to the on­go­ing ef­fects of the COVID-19 pan­demic and the pos­si­bil­ity that lessors may grant rent con­ces­sions past De­cem­ber 31, 2021, the AcSB issued an Ex­po­sure Draft which proposed to ex­tend the op­tional re­lief for both lessees and lessors to De­cem­ber 31, 2022. Com­ments by stake­hold­ers were re­quested by July 30, 2021.

Following a review of the responses to the Exposure Draft, the AcSB approved the proposed changes to Section 3065 at its meeting on September 15-16, 2021. The required amendments to Section 3065 in Part II of the CPA Canada Handbook – Accounting  were made on December 1, 2021.


Other developments

December 2021

On December 1, 2021, the required amendments to Section 3065 were made to Section 3065 in Part II of the CPA Canada Handbook – Accounting.

June 2021

On June 30, 2021, the AcSB re­leased an Exposure Draft that proposes to extend the relief period for both lessees and lessors on accounting for lease modifications received or granted as a result of the COVID-19 pandemic to December 31, 2022. This amendment would also apply to not-for-profit organizations (NFPOs) applying the standards in Part III of the Handbook, as relevant.  Com­ments by stakeholders are re­quested by July 30, 2021.


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