What is a change in shift

Short-term changes to IFRS 16 and postponement of IAS 1 amendment

The IASB intends to make changes to IFRS 16 at short notice and to postpone the changes to IAS 1 that have already been adopted due to the coronavirus pandemic.

Against the background of rental concessions currently observed in many countries (deferrals, waivers, etc.), IFRS 16 (Leases for accounting for rental concessions at the lessee) is to be amended in order to grant the lessee an exemption limited to 2020 from the assessment of whether a rental concession related to the coronavirus pandemic is to be classified as a leasing modification.

Relief for the balancing party

The application of this optional exception rule results in the accounting of these rental concessions as if they were not a modification of the lease. This eliminates the need for the balancing party to review all leasing or rental contracts, to legally assess a corresponding rental concession against the background of the respective contract design and, if necessary, to determine new discount rates.

When does the amendment to IFRS 16 apply?

The exemption should come into force as soon as the final amendment is issued by the IASB. In order to be able to complete this process in a timely manner (if possible by the end of May), the board will ask the IFRS trustees to approve a comment period of only 14 days for the exposure draft with the proposed change.

Note: Lessor accounting changes are not intended.

Entry into force of the amendments to IAS 1

The date of entry into force will be postponed by one year, i.e. now to annual reporting periods beginning on or after 01.01.2023. For this purpose, an exposure draft is expected to be published at the beginning of May, with a comment period of 30 days. In addition, various changes to the timing of the IASB were decided in response to the effects of the coronavirus pandemic.

The submission deadlines for the following consultation documents have been extended by around three months:

a) Draft of the new standard for general presentation and disclosures in financial statements;

b) Request for information in the context of the comprehensive review of the IFRS for SMEs;

c) Discussion paper on disclosures and the impairment of goodwill.

The publication of further consultation documents planned for 2020 will also be postponed.

(DRSC from April 17th, 2020 / Viola C. Didier, RES JURA editorial office)

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