EFRAG draft comment letter on the IASB's proposed amendment to IFRS 16 and COVID 19

  • EFRAG (European Financial Reporting Advisory Group) (dk green) Image

14 Feb, 2021

The European Financial Reporting Advisory Group (EFRAG) has issued a draft comment letter on the IASB's Exposure Draft ED/2021/2 'Covid-19-Related Rent Concessions Beyond 30 June 2021 (Proposed Amendments to IFRS 16)'.

The proposed amendment would extend the scope of the 2020 amendment by increasing the period of eligibility to apply the practical expedient from 30 June 2021 to 30 June 2022.

EFRAG supports the proposals and agrees that there remains a need to provide relief for lessees given the ongoing challenges that lessees face in assessing whether lease modifications have occurred under the circumstances of COVID-19. EFRAG supports a continued time restriction to ensure only the Amendments only apply to COVID-19-related concessions and to limit the effect of reduced comparability due to the Amendments.

Additionally EFRAG supports the proposed transition requirements, believes that it should be applied on a modified retrospective basis, and believes that that early adoption should be allowed at the date of the IASB’s issuance of the extension of the amendment.

Comments on EFRAG's draft comment letter are requested by 22 February 2021. For more information, see the press release and the draft comment letter on the EFRAG's website.

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