USA Expense

[Enrichar]

The company I am working for is leasing a manufacturing facility. They are spending money to remodel/revamp the facility (paint/flooring/etc). How should these transactions be accounted? It is not extending the life, or increasing the value, of the property for us, because we are leasing. Would this simply be considered repair/maintenance? Thanks

 

[kirby]

You need to study the concepts on leasehold improvements. Do those payments benefit your use of the space in future periods?

 

[Enrichar]

You need to study the concepts on leasehold improvements. Do those payments benefit your use of the space in future periods?

Yes, they are to our benefit.

 

[kirby]

Then you have a case to capitalize the costs as leasehold improvements