Question. ((Do we capitalise the cost of long leasehold property))
If no, then how we can charge depreciation of restaurant that hold a 25 year lease.? This is an example mention in F3 but I studied in FA1 that rent of long leasehold property is revenue expenditure then how it’s capitalised here???
There can ve two elements to a lease:
1 An up-front capital payment to acquire the lease. This is capitalised and amortised/depreciated over the life of the lease.
2 Sometimes there is also a (usually) small ground rent to pay each year. This is an annual expense.
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