Lease Termination, Abandonment, and Impairment

Here's a link to the PDF of Matt's article in the Corporate Real Estate Journal - Accounting for shrinking real estate footprints: Applying lease termination, abandonment and impairment accounting rules in the real world : https://www.dropbox.com/scl/fi/48c58moohp7lj47kyekp2/CREJ-Article-Waters-2024.pdf?rlkey=4fhxx767bootpel304qfkny3b&st=ysv1accr&dl=0

The real estate team might be expecting to abandon a leased building, which will result in the entire balance of the ROU asset going to expense on the income statement by the cease use date. 

However, if the real estate team has the intent and ability to find a subtenant, the abandonment might become an impairment, and the expense recorded as an impairment loss will be less than the expense recorded for an abandonment.

Or, if an early termination can be negotiated, the outcome might be even better.