ASC 840: Pandemic lease concessions
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ASC 840: Pandemic lease concessions

2 years ago · 190.3 KB Download

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The COVID-19 pandemic caused widespread closure of businesses with near nationwide stay-at-home orders. As a result, many businesses that depend on customer traffic suffered massive revenue shortfalls. For many of these businesses, rent expense is a significant fixed operating expense.

Many lessees have negotiated lease concessions which include rent deferrals and rent forgiveness. Other lessees have stopped paying rent asserting force majeure or other clauses while continuing to negotiate with lessors. In this report, we will focus exclusively on FASB ASC 840 which will remain the primary guidance for private companies for operating leases until at least December 31, 2021.

We feel that private companies with pandemic related lease concessions have significant financial reporting flexibility that may not be readily apparent to them. This flexibility may help entities as they plan to recover.

Download the ASC 840 Pandemic lease concessions report

File name: CPEA-leases-concession-covid.pdf

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