IFRS 16 Covid rent concessions
IFRS 16 Covid rent concessions
Many people will be aware of the quickly-written covid-19 rent concession amendment, for lessees.
When can reporters in the EU actually apply it in their financial reporting?
When can reporters in the EU actually apply it in their financial reporting?
Re: IFRS 16 Covid rent concessions
EFRAG expects endorsement in Q3/Q4 of this year. I assume it will be retroactive back to 01/06/2020 in line with IFRS effective date?
http://www.efrag.org/Assets/Download?as ... %25202.pdf
http://www.efrag.org/Assets/Download?as ... %25202.pdf
Re: IFRS 16 Covid rent concessions
ok great, thanks. So the IASB turn it round sharpish and the EU sit on it for a few months! Not much help to those who for example have June year ends, wish to apply the amendment, and must report quickly.
Re: IFRS 16 Covid rent concessions
That about sums it up. Best you can do is drag out finalisation and hope for endorsement sooner rather than later.
Re: IFRS 16 Covid rent concessions
Earlier adoption is also permissible as per IASB thought the constraint seems to be from EU regulator it seems.
Re: IFRS 16 Covid rent concessions
But can't early adopt something not endorsed
Re: IFRS 16 Covid rent concessions
you may go for 'quiet' early adoption as long as the effect is immaterial
Re: IFRS 16 Covid rent concessions
have a look at this statement by ESMA:
https://www.esma.europa.eu/sites/defaul ... ations.pdf
it seems to me that they basically ask local regulators to turn a blind eye to early adopters of the covid-19 rent concession amendment
https://www.esma.europa.eu/sites/defaul ... ations.pdf
it seems to me that they basically ask local regulators to turn a blind eye to early adopters of the covid-19 rent concession amendment
Re: IFRS 16 Covid rent concessions
It’s surprising EU regulators need so much time. This amendment was ratified in May in my country.
Re: IFRS 16 Covid rent concessions
A relevant update from the FRC:
"The Financial Reporting Council (FRC) has today confirmed it will not pursue regulatory action where issuers take advantage of the provisions contained in the Accounting for Lease Modifications (Amendment to IFRS 16 – Covid-19-Related Rent Concessions) before adoption by the EU."
https://www.frc.org.uk/news/august-2020 ... dification
"The Financial Reporting Council (FRC) has today confirmed it will not pursue regulatory action where issuers take advantage of the provisions contained in the Accounting for Lease Modifications (Amendment to IFRS 16 – Covid-19-Related Rent Concessions) before adoption by the EU."
https://www.frc.org.uk/news/august-2020 ... dification
Re: IFRS 16 Covid rent concessions
It's interesting because it opens the door for a de facto alternative IFRS regime so long as the regulator says it's not going to 'prosecute' incorrect reporting.
What about auditors signing off that accounts are properly prepared under IFRS?
What about auditors signing off that accounts are properly prepared under IFRS?
Re: IFRS 16 Covid rent concessions
This statement is interesting:
'Where companies use the reliefs permitted by the IFRS 16 amendment, they are expected to disclose this in the notes to their financial statements.'
I thought there will rather a 'don't ask, don't tell' approach with materiality considerations in the background
'Where companies use the reliefs permitted by the IFRS 16 amendment, they are expected to disclose this in the notes to their financial statements.'
I thought there will rather a 'don't ask, don't tell' approach with materiality considerations in the background
Re: IFRS 16 Covid rent concessions
I guess your basis of preparation changes from "These financial statements have been prepared in accordance with EU endorsed International Financial Reporting Standards (IFRS)" to simply "These financial statements have been prepared in accordance International Financial Reporting Standards (IFRS)"
As long as they are prepared on that basis, that's the basis on which you audit.
As long as they are prepared on that basis, that's the basis on which you audit.
Re: IFRS 16 Covid rent concessions
well, but the problem is that issuers in the EU are not allowed to prepare their FS under 'clean' IFRS
Re: IFRS 16 Covid rent concessions
Some more detail here if you are interested. I think it puts preparers in an awkward position for the reasons you have noted.
https://www.accountancydaily.co/frc-ame ... oncessions
https://www.accountancydaily.co/frc-ame ... oncessions
Re: IFRS 16 Covid rent concessions
We prepare our FS under IFRS and have lease obligations in excess of 1b USD and have disclosed the fact and the amount of rent relief recognized in the P&L in our interim financial statements.Marek Muc wrote: ↑18 Aug 2020, 14:17 This statement is interesting:
'Where companies use the reliefs permitted by the IFRS 16 amendment, they are expected to disclose this in the notes to their financial statements.'
I thought there will rather a 'don't ask, don't tell' approach with materiality considerations in the background
Re: IFRS 16 Covid rent concessions
are these IFRS 'as approved by the IASB' or IFRS 'as adopted by your local authority'?
the thing is that in the EU you cannot use IFRS 'as approved by the IASB' but IFRS 'as adopted by the EU', and the EU has not yet approved the covid IFRS 16 amendment...
the thing is that in the EU you cannot use IFRS 'as approved by the IASB' but IFRS 'as adopted by the EU', and the EU has not yet approved the covid IFRS 16 amendment...
Re: IFRS 16 Covid rent concessions
IFRS as approved by IASB.
Re: IFRS 16 Covid rent concessions
Then you're in a substantially different situation than issuers in the EU
Re: IFRS 16 Covid rent concessions
Now adopted by the EU...
Re: IFRS 16 Covid rent concessions
I'd say it didn't take long given EU's typical legislative pace