FRC proposes extension of COVID-related temporary rent concessions
The Financial Reporting Council (FRC) has issued an exposure draft that proposes to extend the application period of requirements that cover the accounting treatment of temporary rent concessions occurring as a direct consequence of the COVID-19 pandemic by one year.
FRED 78 proposes that requirements originally introduced into FRS 102 and FRS 105 in October 2020, apply to rent concessions that reduce only lease payments originally due on or before 30 June 2022, provided the other conditions for applying the requirements are met.
"As pandemic restrictions continue, extending the existing time condition is considered necessary to ensure these concessions are accounted for consistently and in a way that best reflects their substance," the FRC said in a statement.
The amendments are proposed to be effective for accounting periods beginning on or after 1 January 2021, with early application permitted.
The FRC is inviting comments on FRED 78 by 11 May 2021.
The exposure draft is available here.