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Councils may be the recipient or provider of COVID-19 support packages.

Where councils are the recipient of COVID-19 funds, refer to revenue in relation to the accounting treatment.

Where councils are providing COVID-19 support to the community, the form and substance of the support needs to be assessed. We understand that some councils are providing items such as care packages, information centres and helplines and other support to local businesses.

Rental support – where councils are providing rental relief to tenants, the council needs to assess whether the support provided is a modification and follow the relevant accounting for modifications in AASB 16 paragraphs 79 and 80.

Relief on payments owed to council – refer to the discussion above on expected credit losses. The time value of money effect of the deferral may cause an increase in the ECL provision.

Support provided to the community - AASB 137 contains guidance specific to the recognition of liabilities arising from local government existing public policies, budget policies, election promises or statements of intent (paras. Aus26.1 and Aus26.2). In some instances, a liability is recognised where council has little, if any, discretion to avoid a sacrifice of future economic benefits, such as clear and formal policy to provide financial aid to certain elements of the community to assist in the current environment.

Any decisions prior to 30 June directly by councils, or indirectly by State and Federal Governments,  need careful consideration. The financial impacts of actioning those decisions by councils after 30 June, may require reflection in the 30 June 2020 financial statements.