Moving to hybrid working

27 July 2021 (updated 31 October 2023)

Global IFRS Institute | Uncertain times

Following a change in working practices and an increase in home- and hybrid-working models, some tenants are looking to either exit or renegotiate their real estate leases.

Changes in the expected use of office space could have significant accounting consequences. For example, the right-of-use (ROU) asset in a lease arrangement could be impaired or there could be a change in its estimated useful life.

Companies need to assess the potential impacts for their financial reporting, because a decision to vacate or sub-let property is a potential indicator of impairment.

To help with this assessment, we provide insight and practical guidance in our guide to Testing leased office space for impairment, (PDF 522 KB) using ten key questions that companies might ask.