ICAS encourages a principles-based review of IFRS 16, Leases
By Anne Adrain, Head of Sustainability and Reporting
3 March 2021
ICAS has responded to the IASB proposal to amend IFRS 16, Leases, for COVID-19-related rent concessions beyond 30 June 2021.
The International Accounting Standards Board (IASB) recently consulted on proposals to extend the availability of the practical expedient in paragraph 46A of IFRS 16, Leases, to apply rent concessions for which any reduction in lease payments affects only payments originally due on or before 30 June 2022.
The previous relief applied to any reduction in lease payments affecting only payments originally due on or before 30 June 2021.
ICAS has responded to the consultation in support of an extension to the relief but has highlighted that there is still a great deal of ongoing uncertainty around when the current lockdown and trading restrictions might be lifted. As a result, certain industries and sectors may require relief beyond the proposed extended end date of 30 June 2022.
The ICAS response encourages the IASB to consider undertaking a principles-based review of IFRS 16, in line with our ‘Principles not rules’ position, to learn from some of the application issues highlighted by the pandemic and to make the standard future proof.