Hear PwC respond to frequently asked questions on right-of-use asset impairment, lease abandonments, and subleases.
In the current environment, there are a number of complexities in applying the lease impairment model, specifically to right-of-use (ROU) assets. Heather Horn is joined by PwC National office subject matter specialists to discuss the most important considerations when assessing ROU assets for impairment.
Topics include:
  • 1:09 - Right-of-use asset impairment model. As leases are now recorded on the balance sheet, we begin with a recap of how the long-lived asset impairment model works.
  • 3:28 - Common questions on ROU asset impairment testing. When it comes to applying the impairment  model to ROU assets, things can get tricky. We answer common questions received on the treatment of lease components and variable lease payments, recoverability testing, and discount rates.
  • 10:50  - Other ROU asset impairment considerations. If a company determines that an impairment charge should be recognized, what’s next? We explain.
  • 14:34 - Lease abandonment. In the current environment, companies are reevaluating their real estate footprint. We walk through the implications once this decision is made.
  • 17:12 - Subleases. We close with a discussion around the decision to sublease and what companies should focus on if they are rethinking the use of the asset.

About our guests
Andreas Ohl is a partner in PwC's National office where he focuses on mergers and acquisitions under US GAAP and IFRS. Andreas is chairman of the Business Valuation Standards Board at the International Valuation Standards Council, is a member of the working group that authored the AICPA's In-Process R&D guide, and has served as a member of the FASB's Valuation Resource Group.
Steve Dolph is a director in PwC’s National office, specializing in accounting for business combinations and related areas, including asset acquisitions, disposals, and impairments. Prior to joining the National Office, Steve had more than 10 years of experience as a member of PwC's Private Company Services group, focusing on private company accounting issues and business solutions.
About our host
Heather Horn is PwC’s National office thought leader, responsible for developing our communications strategy and conveying firm positions on accounting and financial reporting matters. She is the engaging host of PwC’s accounting and reporting weekly podcast and quarterly webcast series, as well as periodic webcasts for the power and utilities industry. With over 25 years of experience, Heather’s accounting and auditing expertise includes financial instruments and rate-regulated accounting.
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