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Refurbishment (repair) costs for premises under Operating lease

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › Refurbishment (repair) costs for premises under Operating lease

  • This topic has 1 reply, 2 voices, and was last updated 9 years ago by MikeLittle.
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  • January 2, 2016 at 12:16 am #293192
    elen75
    Member
    • Topics: 10
    • Replies: 4
    • ☆

    Hi,

    Please advise if refurbishment costs incurred by the lease for a premises under operating lease /in order to bring the premises into working condition, say for an office/ (not part of the lease contract) should be expensed when incurred or should be spread over the period of lease (say 5 years)

    Thank you

    January 2, 2016 at 9:34 am #293283
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23300
    • ☆☆☆☆☆

    Over the period of the lease would be my initial reaction! So capitalise as “tenant’s improvements” and depreciate over the period of the lease (say 5 years)

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