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Use this type after your team has tested the ROU asset for impairment under ASC 360-10 and determined the impairment loss. ASC 842-20-35-9 requires lessees to apply the ASC 360-10 impairment guidance to ROU assets, usually as part of the asset group that contains the leased asset. Spacebase records the loss you enter; it does not perform the recoverability test. Enter a description, the Impairment date, and a positive impairment amount. Spacebase debits lease expense for the impairment and credits the ROU asset. Your company can instead be configured to credit accumulated amortization; contact Spacebase support if your policy requires that presentation. If you select Book impairment after monthly entries, the impairment date must be a month end. The impairment then posts after that month’s regular entry and the new schedule starts on the first of the next month. Expense pattern after impairment. ASC 842-20-25-7 changes how an operating lease is expensed after impairment. Instead of a single straight-line lease cost, the lessee recognizes amortization of the remaining ROU asset on a straight-line basis plus accretion of the lease liability. Spacebase applies this automatically: the impaired ROU asset is amortized straight-line over the remaining term, and total lease cost becomes front-loaded, similar to a finance lease. Any unamortized incentives or initial direct costs are folded into the accrued rent balance at the impairment date. This pattern carries through to every later snapshot. For a finance lease, the expense pattern is unchanged: the reduced ROU asset continues to amortize straight-line and interest accrues on the liability. The impairment does not change the lease liability. You still owe the remaining payments, so the liability continues to accrete and pay down on the original schedule.