FASB update: Accounting for lease concessions related to COVID-19
The FASB recently issued guidance on accounting for lease concessions related to the COVID-19 pandemic. See their answers to frequently asked questions for lessors and lessees.
In light of economic challenges presented by the COVID-19 pandemic, many lessors have agreed to offer lease concessions to lessees. According to stakeholders, forgiveness of payment and deferral of payments are expected to be the most common types of concessions granted. Stakeholders also have noted that there could be a substantial number of contracts—for both lessors and lessees—affected by these concessions.
Needless to say, there isn’t a playbook for accounting for lease concessions in the midst of a global crisis. To provide lessees and lessors with much needed guidance, the Financial Accounting Standards Board (FASB) has published its responses to frequently asked questions on the topic.
See the FAQ here
We expect the FASB to issue additional guidance as this unprecedented situation evolves. In the meantime, if you have questions about how your leases could be affected by the COVID-19 pandemic, please contact your DS+B CPA today.
For the latest COVID-19 resources, news and updates, please visit our COVID-19 Clarity Center.