Lease Accounting
Scott Lane (CFO and CRO, TPG Credit Management)
| Nov 11, 2009Attached are the current US GAAP rules for lease accounting. The main effort is to determine what kind of lease one has as the lessee or lessor, the accounting requirements and mechanics are then driven from there.
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Company: Independent Stationers, Inc.
We are relocating to a new office. We are required to pay a significant termination fee to exit our current lease. The new lease includes a discretionary allowance which covers the old lease termination fee and our relocation expenses. We had planned to use the discretionary allowance in the new lease to offset our termination fee and our relocation expenses. Our auditors tell me that I must expense the termination fee in the current year, which I agree with, but that I must amortize the discretionary allowance over the term of the new lease. Is there any way I can justify using the discretionary allowance this year to offset the termination fees.