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 abatement or deferral, but with a lease modification to early terminate the lease.
- Rent abatement or deferral, but with an extension of the term and/or expansion of premises / assets under lease.
LeaseCalcs’ guide to dealing with COVID-19 related lease concessions and amendments will help you get your accounting right, while also helping you choose the correct options to best protect your financial results.
Do you know which option is better for your P&L right now? Which option helps improve balance sheet metrics? EBTIDA?