USA Cost of Removal charges for Leased Asset

[FooserX]

Hello everyone,

Thank you for your thoughts in advance. Here is the situation:

We are leasing the building that is a helipad at a hospital from the state. This asset is not being depreciated or kept track of. It's just a lump asset cost for the capital lease of the hospital.

We are creating a new construction project to replace the foam fire tanks.

We will be removing the old foam tanks, and installing new ones.

Currently, this project is just set to have everything go through CIP - Construction Work in Progress, which will then have an asset created for all costs.

Should the charges directly tied to COR be included in the CIP asset account? Or should they go to an accum account? Only we don't have an "Accum" for this capital lease really...just the amortized monthly amount. My previous job, we booked all cost of removal and salvage costs to accum, to offset as a gain/loss...but that was easy and clean because we have individual assets, and a book that pro-rated equipment from different years.

Thoughts? Questions?

Thanks!
Scott

 

[kirby]

Should the charges directly tied to COR be included in the CIP asset account?
Yes, part of the cost of replacing the foam fire tanks.