accounting for new HVAC system under finance

USA Discussion in 'General Accountancy Discussion' started by AGH the CPA, Jun 11, 2018.

  1. AGH the CPA

    AGH the CPA

    Jun 16, 2017
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    Our company got a new HVAC system under a financing deal

    sample numbers rounded for ease

    yield 6%
    amount $80,000
    monthly payment $1500
    advance payment (first and last 2 months) $4500
    documentation fee $300

    Best way to account for this? It is a capital improvement right? We don't own our building though...
    AGH the CPA, Jun 11, 2018
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  2. AGH the CPA

    kirby VIP Member

    May 12, 2011
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    Capital improvement - yes!
    If you are in a building you don't own, then you are likely leasing the space. So capitalize this as a "Leasehold Improvement."
    kirby, Jun 12, 2018
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