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27 Apr. 2020

Exposure Draft 300 Amendment to Australian Accounting Standards - Covid-19-Related Rent Concessions

An amendment to AASB 16 Leases has been proposed to provide relief to lessees when applying the standard to Covid-19-related rent concessions, such as rent holidays and temporary rent reductions.

Various lessees affected by Covid-19 are currently seeking rent concessions, which in some cases may be considered as a lease modification under AASB 16. In that case, the lessee would be required to remeasure lease liability using a revised discount rate.
Considering the large volume of contracts that might be affected, the assessment of whether a rent concession constitutes a lease modification can be challenging.
The ED 300 Amendment to Australian Accounting Standards - Covid-19-Related Rent Concessions proposes to address this issue by:

a. providing lessees with an optional exemption from assessing whether certain Covid-19-related rent concession is a lease modification;
b. requiring lessees that apply the exemption to account for Covid-19-related rent concessions as if such concessions were not lease modifications;
c. requiring lessees that apply the exemption to disclose that fact;
d. requiring lessees to apply the exemption retrospectively, recognising the cumulative effect of initially applying the amendment as an adjustment to the opening balance of retained earnings (or other component of equity, as appropriate) at the beginning of the reporting period in which a lessee first applies the amendment;
e. making the exemption effective on issue of the final amendment.
The ED will be open for comment for 14 days only. Please have your say and send your comments to the AASB or IASB by 8 May 2020 via the AASB website, LinkedIn or email to

To promote timely feedback, comments can also be sent via the survey.  The AASB seeks feedback particularly on whether the proposed relief will be beneficial in the Australian context.