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Accounting For Lease Contract Termination

If we give notice to cancel an office lease, I believe the contraction fee liability shall be recognized when written notice is given. Would leasehold improvements on our books be written off at the time of the termination notice or when the space is actually vacated? Thanks.

Answers

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

I would write-off when I knew the liability with the lease was officially over (when you gave the keys back).

Jeff McGlaughlin
Title: Corporate Controller
Company: Withheld
(Corporate Controller, Withheld) |

Anonymous, you are correct. FASB 146, paragraph 15, requires you to recognize the Lease Termination Liability when you give written notice (assuming that's what the contract requires for an early termination).

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