How are retrospective COVID-19 rent reliefs recognised?

Patricia Stebbens and Daina Klunder respond to a common question about rent concessions which affect prior periods.

Many lessees have requested rent concessions from lessors over the past year. Rent concessions may include a one-off rent reduction, rent waivers or deferrals of lease payments. Scenario Company A enters into an agreement to rent office space in a building for three years on 1 January 2020. Lease payments are $2,000 per quarter, payable at the beginning of each quarter. The incremental borrowing rate applicable for this lease is 3.75% per annum. Lease liability schedule for the first year ...

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Authors: Patricia Stebbens, Daina Klunder

Published Date: 18 February 2021