IASB has published a document about IFRS-16 in which it provides clarifications regarding the application of the standard’s provisions to rent concessions granted as a result of coronavirus crisis, without adding, removing nor changing the requirements of the said standard.
To be brief, IAS emphasizes in this document the necessity of determining whether the contract has been amended or not. For that, the entity should consider not only the lease contract, but also any applicable law or regulation.
According to IFRS 16’s requirements, a lease modification can only result from:
If one of the conditions above is fulfilled, the entity should then consider whether the change was part of the original terms and conditions of the lease, including the applicable law or regulation and also any relevant facts and circumstances (IFRS 16, paragraph 2).
Thus, a change in lease payments due to the execution of government actions in response to COVID-19 crisis cannot be considered as a lease modification.
Otherwise, if it's deemed that there is a lease modification, “the lessee applies paragraphs 44-46 of IFRS 16 and a lessor applies paragraphs 79-80 or paragraph 87 of IFRS 16.”
For further information regarding the treatment of rent concessions arising from the COVID-19 pandemic in respect of IFRS 16 and the other IFRS Standards, please refer to the attached document.