FASB Issues Q&A on Accounting for Leases During COVID-19 Pandemic
The Financial Accounting Standards Board (FASB) staff today issued a question-and-answer document to address stakeholder questions on the application of the lease accounting guidance for lease concessions related to the effects of the COVID-19 pandemic.
Many lessors are, or will be, providing lease concessions to tenants impacted by the economic disruptions caused by the pandemic. As part of the Board’s continuing commitment to educate stakeholders and to provide interpretive guidance on accounting for lease concessions, the FASB staff has developed this Q&A to respond to some frequently asked questions and to help stakeholders navigate the guidance in this area. Consequently, for concessions related to the effects of the COVID-19 pandemic, an entity will not have to analyze each contract to determine whether enforceable rights and obligations for concessions exist in the contract and can elect to apply or not apply the lease modification guidance in Topic 842 Leases (or Topic 840 Leases) to those contracts.
The FASB staff will continue to monitor this area to determine whether to provide additional clarification in the future.
In addition to the above, the FASB announced that its May 18 leases roundtable will be postponed to a future date to be determined. The delay will allow the Board and staff to focus their resources on supporting stakeholders during the pandemic.