The government has amended certain Indian Accounting Standards (Ind-AS), including the standard relating to leases amid the coronavirus pandemic
Ind-AS 103, 116 and some other standards have been amended by the Corporate Affairs Ministry.
While Ind-AS 103 pertains to business combinations, Ind-AS 116 relates to principles for recognition, presentation and disclosure of leases.
In the wake of the pandemic, many lessors have extended rent concessions to lessees. However, applying the Ind-AS 116 requirements for changes to lease payments could have posed practical difficulties in the current situation.
Against this backdrop, the ministry has amended the rules whereby entities would get relief from lease modification accounting due to Covid-19 related rent concessions. The amendments can be followed by lessees for annual reporting periods beginning on or after April 1, 2020.
A notification was issued to amend the Companies (Indian Accounting Standards) Rules, 2015 and the amended rules were finalised by the ministry in consultation with the National Financial Reporting Authority (NFRA).
Notification Link: http://www.mca.gov.in/Ministry/pdf/Rule 24072020.pdf