Abandoning Office Space Creates Lease Accounting Headaches

Companies like Dropbox Inc., Zynga Inc., and many others have seized on the work-from-home trend during the pandemic to shutter offices and shrink their real estate footprints. But saving money and reducing worker commutes come with a bookkeeping cost: juggling the nuances of new lease accounting rules.

Reducing a few rented floors in an office building or getting rid of leased corporate headquarters isn’t as simple as negotiating new lease terms and erasing a lease obligation from a balance sheet. Add in dozens of changes in a short period of time with rules that are relatively new to public companies, ...