Accounting for Lease Concessions Related to COVID-19

June 2020

During these challenging and uncertain times in which lessees affected by COVID-19 negotiate with their landlords to postpone or avoid making rent payments, the FASB Staff provided relief on the accounting for such concessions. 

Because of the disruption caused by the Coronavirus Disease 2019 (also referred to as COVID-19), it is expected that many lessors will provide (or that many lessees will request) rent concessions. These rent concessions may take various forms and may include free (or reduced) rent, deferral of rent payments interest free, or cash payments to the lessee when operations of the lessee are interrupted or are significantly affected by COVID-19. The uncertainty about COVID-19 could also result in consecutive concessions; for example, first a rent deferral followed by a partial rent abatement in a subsequent period.  



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