What is the Difference in Accounting for a Full and Partial Lease Termination?

If a lease is fully or partially terminated before the expiration of the lease term, there are accounting implications regardless of whether the lease is classified as a finance or an operating lease as denoted in the chart below:

Termination Type	Action
Full Termination	Derecognize the ROU Asset and Corresponding Lease Liability. Any difference would be recognized as a gain or loss related to the termination of the lease. If a lessee is required to make any payments or receives any consideration when terminating the lease, it would include such amounts in the determination of the gain or loss.
Partial Termination	Account for partial termination as a lease modification. If a lessee is required to make any payments or receives any consideration, it would include these amounts in the determination of the revised consideration in the modified contract.

Accounting Guidance Referenced:

ASC 842-20-40-1
Deloitte A Roadmap to Applying the New Leasing Standard (2020) 8.7.2