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- Lease Accounting
- Recognizing a Lease
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Lease Accounting
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Broker Deals CRM
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Monthly Release Notes
What is Deferred Rent?
Deferred Rent was a concept applicable to legacy lease accounting standards (ASC 840, IAS 17) and would occur when a cash lease payment differs from its expense recognized on the financial statements and occurs when the lessee is provided free rent in one or more periods, or if there are escalating rent payments.
Why is Deferred Rent important?
Deferred Rent is important to consider as it directly impacts the calculation of the ROU Asset at transition. This needs to be added for leases that existed prior to the ASC 842/IFRS 16 adoption date as it generates the "Day 1" transition to ASC 842/IFRS 16 entries. The balance of Deferred Rent upon transition to the new accounting standard(s) will reduce the calculated ROU asset.
Note, once you have transitioned to ASC 842/IFRS 16, this field should not be completed within Occupier's Measurement Process.