Hot Topic | May 2020

 

KPMG’s Q&As on how to apply the FASB staff’s guidance

Updated: The FASB staff has issued guidance that permits a simplified approach to accounting for COVID-19 related rent concessions – for lessees and lessors. KPMG answers questions about the application of this optional staff guidance.

Applicability

  • All companies that are lessees and/or lessors

Relevant dates

  • Effective immediately

Key impacts

  • If specified criteria are met, lessees and lessors can elect to forgo the evaluation of the enforceable rights and obligations of the original lease contract that would otherwise be required by US GAAP when accounting for COVID-19 related rent concessions.
  • Instead, the company accounts for those concessions either:
    • as if the concession was required by the existing lease contract; or
    • as a lease modification.

 

Spotlight on contributors

Scott Muir

Scott Muir

Partner, Dept. of Professional Practice, KPMG US

 

 

Subscribe to our newsletter

Receive timely updates on accounting and financial reporting topics from KPMG.