Deloitte comment letter on tentative agenda decision on non-refundable VAT on lease payments

Published on: 25 May 2021

We have commented on the IFRS Interpretations Committee's publication in the March 2021 IFRIC Update of the tentative decision not to take onto the Committee’s agenda the request for clarification on how a lessee accounts for any non-refundable value added tax charged on lease payments.

We agree with the IFRS Interpretations Committee’s decision not to add this item onto its agenda. However, we do not agree with the proposed wording of the agenda decision. We believe that the agenda decision should set out the appropriate treatment of VAT charged on lease payments as an explanation of the appropriate accounting treatment in the agenda decision would prevent diversity arising in practice.

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