COVID-19: Accounting for Lease Concessions
In April 2020, during the midst of the pandemic, the Financial Accounting Standards Board (FASB) issued a Staff Q&A discussing how lease concessions being made as a direct result of COVID-19 could be treated under Topic 842 and Topic 840. Certainly, this was important for public companies to understand and report on for their quarterly filings; however, many private companies, especially restaurants, have been busy focusing on keeping their business alive and responding to the gauntlet of challenges facing them in a remote work environment and often with fewer employees.
With the onslaught of lease concessions being offered as a direct result of COVID-19 in the form of deferred rent or rent abatement (free rent), the FASB recognized that the time needed to analyze leases and properly account for them under lease modification guidance was overly burdensome. To explore the practical approach to accounting for lease concessions now allowed by the FASB, visit us online.
