We entered into a sub-lease on a property where the FV of the cash flows was going to be less than we earned therefore we booked a loss up front on the sub-lease. Now we are going to terminate the sub-lease contract after a few months. Can we reverse the remaining loss on our books as we do not have the sub-lease anymore?
Accounting for a Sublease
Answers
This is not truly a real estate question, but an
Nicholas - the answer depends on what your company plans to do with the space. Are you taking possession of the space back, finding a new sub-tenant at no loss, etc.? I went over the guidance on this some time ago for a similar situation. Not a fun read!
Filed Under:
Accounting