In anticipation of disruptions resulting from the Covid-19 Pandemic (Covid-19), on June 3, 2020, the Financial Accounting Standards Board (FASB) granted a one-year effective date delay for certain entities implementing the new lease accounting standard (Topic 842). The effective date delays are as follows:
On April 10, 2020, the FASB issued a Staff Q&A to provide operational interpretative guidance when accounting for lease concessions related to the effects of Covid-19. In the Staff Q&A, the FASB deemed it acceptable for entities to treat lease contract changes resulting from Covid-19 as a lease concession rather than a lease modification. Making this election will save time by eliminating the need to analyze each lease contract change and, if applicable, apply lease modification accounting. There are two requirements to be able to make an election to account for a lease concession rather than a lease modification:
If you want to read the Staff Q&A here is a link to the FASB website:
If you prefer to leave the technical reading to us and want help evaluating the above implications or jump starting the Topic 842 lease accounting implementation process, please know that we have the experience to support you. Feel free to contact me at email@example.com.
Posted on October 8, 2020 at 11:07 AM