The global health emergency is indeed giving us a lot of challenges and for sure the economic crisis that it’s coming with it as a consequence is one of the most important to our society.
One of the sectors of most impact that has suffered by this biological virus, is the real state sector. A lot of companies are working from home and other sectors, they just had to close their stores due to social distancing and government regulations, so what happened with the monthly expense and payment of rent building/storage etc.?
The Mexican financial standards board has published its own interpretation regarding the NIF D-5 Leasing (Spanish acronym of Financial Reporting Standards) which is compatible with the IFRS-16, on how corporations should recognize the effects on the changing of real states contracts, new deals, benefits and renegotiations, how to evaluate the effects.
In general terms, this document establishes guidance with practical examples on how to apply these changes or benefits given on behalf tenants. It defines in three types of situations:
- Partial waiving of payments
- Payment deferral
- Partially waiving and payments deferment
Important to consider that in order to be eligible to apply and recognize in the financial stamens these specific considerations corporations have to consider the following criteria:
- Benefits and changes are direct consequence of the global health emergency caused by COVID-19
- The modification is les o equal of the amount before the changes.
- Payments are those ones with original due date 31/06/2021
- There are no substantial changes in other terms and conditions of the contract.
The document is available for consultation in the following link (available in Spanish).
At Auxadi we are experts in providing value added services in accounting, tax compliance and international payroll management. We work every day to keep abreast of all legislative developments at an international level, which is crucial in extraordinary and uncertain times such as the ones we are experiencing. If you need to expand on what is set out here, please do not hesitate to contact us.