Lease accounting impacts of the COVID-19 virus

The economic and financial markets effects of the COVID-19 outbreak may have a number of impacts on companies’ lease accounting under ASC 842. This article follows our recent Hot Topics on accounting for rent concessions resulting from the COVID-19 outbreak.

Applicability

• Lessees and lessors impacted by the COVID-19 outbreak.

Relevant dates

Key impacts

The economic and financial markets effects of the COVID-19 outbreak may have one or more of the following impacts on a company’s lease accounting:

• Impairment of a lessee’s ROU assets and lessor’s owned assets held out for lease
• Abandonment of ROU assets
• Lessee discount rates
• Lessee reassessments
• Fair values
• Lease cost and operating lease revenue recognition
  
• Lessor revenue recognition – collectibility