Feb. 4 at 5:03 PM
$AMPX Under US GAAP (ASC 842), when a public company (as the lessee) fully terminates an operating or finance lease and pays a termination fee, it is required to recognize the entire net gain or loss—including the termination fee—in the income statement in the current reporting period (i.e., the quarter in which the termination occurs).
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Amortization over time is not permitted, as the termination is treated as a discrete event that derecognizes the right-of-use (ROU) asset and lease liability immediately. Key Accounting Treatment Full Derecognition: Upon termination, the lessee removes the ROU asset and lease liability from the balance sheet. Any difference between these amounts (net of the termination fee) is recorded as a gain or loss in the current period's income statement.
