The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has issued a Public Statement recommending coordination of supervisory action with regards to issuers’ accounting for COVID-19-related rent concessions

ESMA has recently issued a Public Statement to promote coordinated action by National Competent Authorities (NCAs) in the context of the COVID-19 pandemic in relation to issuers’ obligations to publish periodic information that is drawn up in accordance with the relevant reporting framework.


In view of the difficulties of IFRS 16, ESMA expects that, provided that the European Parliament and the Council do not object to the endorsement of the IFRS 16 amendment, NCAs will not prioritise supervisory actions in relation to the application of the requirements for lease modifications contained in IFRS 16 as currently endorsed by the EU to COVID-19-related rent concessions that would otherwise fall within the scope of the IFRS 16 amendment. This coordination of supervisory action would exceptionally apply to financial periods ending on or before 31 July 2020 and as long as issuers apply to those transactions the accounting treatment foreseen in the IFRS 16 amendment. Where issuers apply the IFRS 16 amendment, ESMA and NCAs expect issuers to disclose compliance with this amendment as issued by the IASB in the notes to the financial statements.

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