Bluesea
Sep 26, 2009, 05:47 PM
Hi,
I have to do an assignment about "a payment to secure a sublease in a extremely popular downtown area" and one of the questions is asking "what are the accounting alternatives available?" My answer is to treat it as: 1. deferred cost, an asset (prepaid lease expense) and expense it over the lease period 2. expense the entire amount for the current period 3. treat the amount as a goodwill purchase. My problem is that I am not too sure about the goodwill if it is corret. This amount is not internaly generated and the contract is for the sublease. Any suggestions are greately considered.
I have to do an assignment about "a payment to secure a sublease in a extremely popular downtown area" and one of the questions is asking "what are the accounting alternatives available?" My answer is to treat it as: 1. deferred cost, an asset (prepaid lease expense) and expense it over the lease period 2. expense the entire amount for the current period 3. treat the amount as a goodwill purchase. My problem is that I am not too sure about the goodwill if it is corret. This amount is not internaly generated and the contract is for the sublease. Any suggestions are greately considered.