Updated: Lessees are receiving rent concessions from their landlords to lessen the economic burden of temporary closures and other measures resulting from coronavirus (COVID-19) and civil unrest in Hong Kong. KPMG addresses how to account for rent concessions resulting from these events under ASC 842 as a lessee or a lessor.
Lessees and lessors receiving rent concessions resulting from coronavirus (COVID-19), the civil unrest in Hong Kong and other unforeseen events.
Effective date | Public entities | All other entities |
---|---|---|
Annual periods – Fiscal years beginning after |
December 15, 2018 |
December 15, 2020 |
Interim periods – In fiscal years beginning after |
December 15, 2018 |
December 15, 2021 |
Early adoption allowed in fiscal years beginning after |
N/A |
Immediately |
Accounting for these rent concessions under ASC 842 depends on the enforceable rights and obligations of the parties under the original lease contract.
This includes those arising from the laws of the jurisdiction governing the lease even if not written in the contract, and the nature of any changes agreed by the parties to the terms and conditions of that contract.
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