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broad oak 12/01, bpp revision kit qno. 16
They are doing amortisation for a lease hold property.
it should have been depreciation. why they take lease property as intangible asset?
yes i was mind puzzled too, i did couple of googling too but in vain. The question says “lease” not “leasehold”. if it was a leasehold then it would be all right to amortize because a leasehold is a right to use which is intangible. However, the questions does not specify the property as intangible or tangible, it only says 12 year lease on property which could mean anything i suppose. So i guess we can assume it as an intangible since they are amortizing it.
A lease is a legal right. It is commonly over tangible property – often a building. But the expression covers any asset over which we have a right of use. It is thus correctly amortised as an intangible, even though the asset covered by the lease may itself be tangible
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