Issue link: https://resources.tangoanalytics.com/i/1529537
Key concepts ASC 842 includes limited guidance on accounting for leases that are acquired in a business combination. ASC 805, Business Combinations, provides the framework for accounting for acquired leases, and intersects with ASC 842 for specific accounting considerations addressed by the lease standard. Valuation Concepts: ▪ Above-market rent: the rental payments over the lease term per the lease agreement are greater than current market rent. ▪ Below-market rent: the rental payments over the lease term per the lease agreement are less than current market rent. ▪ In-place lease: represents the inherent value of acquiring an asset with an in-place lease, even if it is at market terms. Acquiree/Lessee balances removed during purchase price accounting: ▪ Deferred rent ▪ Lease incentives ▪ Prepaid rent ▪ Lease restructuring liability under ASC 420 RSM | 7