India has amended the accounting standards to provide relief to companies that received concessions on their rentals after Covid-19 outbreak.
Changes to the Indian Accounting Standards (Ind AS) will allow companies to show the benefit in their profit and loss (P&L) account. The move comes as a huge relief for airlines or retail chains that have many assets or properties on hire.
Until now, if any terms and conditions of an existing lease contract changed, then it would have to be treated as a new lease contract. This meant that if a company got a rental concession for one year in a ten-year contract, the benefit would have to be reworked to reflect its present value, which would be lower than the current value.
