A sign for available restaurant space for lease is seen amid the novel coronavirus pandemic, is seen on May 15, 2020, on the Sunset Strip in West Hollywood, California. (PHOTO / AFP)

LONDON — Firms leasing property will be given an optional accounting exemption for rent reductions during the coronavirus crisis by the International Accounting Standards Board (IASB).

IASB accounting rules are mandatory in more than 140 countries, including Britain, the European Union and Canada, but not in the United States, which has its own regulations.

The amendment is designed to make it easier for lessees, especially those with a lot of lease contracts, to account for COVID-19-related rent concessions

Hans Hoogervorst, Chairman of the International Accounting Standards Board

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“The amendment is designed to make it easier for lessees, especially those with a lot of lease contracts, to account for COVID-19-related rent concessions,” IASB Chair Hans Hoogervorst said in a statement on Thursday.

Coronavirus lockdowns have led retailers and others companies to request rent holidays or cuts on their shop leases.

A skipped rent payment would normally trigger a “modification” in a lease, forcing the lessee to review the contract to see if investors need updating.

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The IASB said the amendment to its lease standard is effective from June 1 and can apply immediately in any financial statements, interim or annual, not yet authorised for issue.

“It applies to covid-19-related rent concessions that reduce lease payments due on or before 30 June 2021,” the IASB added.