MCA ISSUES AMENDMENTS TO IND AS 116: COVID 19 RELATED RENT CONCESSIONS

The spread of COVID-19 has impacted businesses globally, compelling organisations to reassess their operating models, balance sheets and to defer/ minimise outflows to ensure sustainability.

On 24 July 2020, the Ministry of Corporate Affairs (“MCA”), in consultation with the National Financial Reporting Authority (“NFRA”) issued amendments to Ind AS 116, which provided relief for lessees in accounting for rent concessions granted as a direct consequence of COVID-19.

To help businesses understand these amendments and its applicability, we have created a brief reference document highlighting the criteria that must be satisfied for a rent concession to qualify for the practical expedient along with the explanation of the criteria and the practical implications of applying  the practical expedient.