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Impairment considerations for lessees that plan to reduce their real estate
Entities that closed their offices or use them at a reduced capacity due to COVID-19, may consider reducing the use of real estate going forward.
This publication addresses some common issues lessees may encounter if they plan to reduce the amount of space they use. That is, lessees should understand the interaction between the guidance in IAS 36 Impairment of Assets and IFRS 16 Leases. For owners of real estate, an expected change in use will often give rise to similar considerations; the guidance in this article may be applied by analogy.