COVID-19: Leasing questions, answered

To help navigate uncertain times, hear PwC leasing specialists discuss lease rent concessions as companies look ahead to their March 31 reporting.If you’re unsure about how COVID-19 might impact your financial reporting, you're not alone. This podcast is the next episode in a series that will address questions surrounding the impacts of COVID-19 on your financial statements. Heather Horn is joined by John Bishop, a partner, and Suzanne Stephani, a director both from PwC’s National office. In this episode, we’re focusing on questions related to how rent concessions should be accounted for from both a lessee and a lessor perspective.Topics include:1:12 - Overview of rent concessions. We begin by giving background on common types of rent concessions. 6:01 - FASB relief on rent concessions. In response to preparers concerns, the FASB recently provided some relief. John fills us in on the details.  10:30 - Lessee accounting for rent concessions as a modification. The FASB's relief is structured as an election. Now companies are trying to decide whether to make the election. Suzanne walks through the various considerations.  12:46 - Rent concession and force majeure clauses. Here we discuss the alternative if a lessee chooses not to treat a concession as a modification. Suzanne helps us understand what this means.  24:40 - Lessor accounting for rent concessions and collectibility. We close the episode by turning to the lessor. John explains what the FASB’s relief means for lessors and answers some common questions.John Bishop is a partner in PwC's National office and the co-leader of the financial instruments team. In this role, he leads the group in advising the firm’s clients on a wide array of accounting and reporting matters. John specializes in the accounting for derivatives, financial instruments, financing transactions (e.g., securitizations and leasing) and M&A transactions. Suzanne Stephani is a director in PwC’s National office with more than 20 years of experience assisting companies in resolving complex accounting issues. Suzanne specializes in the accounting for debt, preferred stock, leases and cash flows. Heather Horn is PwC’s National office thought leader, responsible for developing our communications strategy and conveying firm positions on accounting and financial reporting matters. She is the engaging host of PwC’s accounting and reporting weekly podcast and quarterly webcast series, as well as periodic webcasts for the power and utilities industry. With over 25 years of experience, Heather’s accounting and auditing expertise includes financial instruments and rate-regulated accounting.Transcripts available upon request for individuals who may need a disability-related accommodation. Please send requests to [email protected].