COVID-19: A Tale of Two Rent Concessions In the words of Charles Dickens, “It was the best of times, it was the worst of times.” Two tenants each received a $150,000 rent concession from their landlord. One tenant saw an immediate $150,000 improvement in net income, the other only $16,666. As a broker helping tenants make important decisions about their business, you must understand why this happened before you finalize another rent concession / lease restructure. COVID-19 related rent concessions – rent deferrals or abatements – take many forms. Often, they are combined with a lease extension, or even a
COVID-19, Rent Concessions & Lease Accounting COVID-19 related rent concessions take many forms, but new guidance from the FASB & IASB oversimplifies the real world scenarios. These six scenarios explain what every tenant or lessee needs to know to comply with the new COVID-19 lease accounting guidance from the FASB & IASB. Pure rent abatement / forgiveness. Rent deferral, with the rent to be repaid later with no other change to the lease. Withholding of rent. Not a deferral, but a unilateral decision to preserve cash. Rent abatement or deferral, but with a contraction in leased premises or assets. Rent
What Finance and Corporate Real Estate must know to improve outcomes and reduce risk. Join our nationally recognized experts in lease accounting and commercial real estate transactions for this exclusive event in Houston. Learn what finance teams need to know about real estate lease negotiations, and what real estate teams need to know about accounting, in order to avoid unpleasant surprises with the new accounting rules. How the new rules are changing real estate transactions and strategy. How can renewal or termination options help or hurt your firm’s financial performance. Why simple changes in your lease negotiations can dramatically improve