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published on 4 June 2020 | reading approx. time 1 minute
According to IFRS 16, the accounting treatment of a lease must be adjusted whenever a lease is modified, such as when rent is temporarily deferred or suspended.
To prevent companies from making these sometimes complex adjustments, the IASB decided a few days ago to simplify the application of IFRS 16 at short notice.
If companies opt for this simplification, depreciation and interest should be booked as before in the case of temporary deferral of rental payments. However, the suspended repayment does not lead to a reduction in leasing liabilities.
In the case of temporary reductions of rent, the differences to the original amount of rent are to be treated as negative variable payments, which reduce the liabilities and are therefore to be booked with an effect on income.
The IASB sets three conditions for this simplification:
See for further details:
https://www.ifrs.org/news-and-events/2020/05/iasb-issues-amendment-to-ifrs-standard-on-leases/
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