USA Fixed Asset Purchase-Leasehold Improvement or Equipment?


Joined
Apr 7, 2015
Messages
4
Reaction score
0
Country
United States
Our company just purchased and had installed two new air conditioners and heating units. The cost was 32k. I'm not sure where to record the sale. We are tenants and pay rent each month. Should I record the units under Equipment or as a Leasehold Improvement? I looked up leasehold improvement for our new roof, and it says the items must be inside the building. The business and building are owned by the same people. The building was placed in a holding company separate from the manufacturing business. The lease states we are responsible for any maintenance issues, so we pay the bills from the manufacturing company.
Thanks,
Peg
 
Ad

Advertisements

bklynboy

VIP Member
Joined
Oct 12, 2011
Messages
549
Reaction score
100
Country
United States
I assume the units remain with the property and therefore is a leasehold improvement and depreciated over lease term. Not sure why you think it has to be inside to qualify - it just has to be part of the premises being leased. If they can be kept by you at expiry of lease its a fixed asset and depreciated over useful life. You will have to consider an Asset Retirement liability to put the premise back in its original use if required by the lease.
 

Ask a Question

Want to reply to this thread or ask your own question?

You'll need to choose a username for the site, which only take a couple of moments. After that, you can post your question and our members will help you out.

Ask a Question

Similar Threads


Top