My company has had a security deposit on the books as "Restricted Cash" for rented office space.
We have come to an arrangement with our landlord and are terminating the lease for that space and the landlord is keeping the security deposit.
Should I charge the lost security deposit immediately to rent expense? Or should I amortize the lost security deposit to rent expense over the remaining life of the lease?

Thank you,
Herman

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Originally Posted by Hermansherman

My company has had a security deposit on the books as "Restricted Cash" for rented office space.
We have come to an arrangement with our landlord and are terminating the lease for that space and the landlord is keeping the security deposit.
Should I charge the lost security deposit immediately to rent expense? or should I amortize the lost security deposit to rent expense over the remaining life of the lease?

Thank you,
Herman

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I think it should be expensed immediately. It also should have been classified as some sort of deposit rather than restricted cash previously.

Quote:

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Originally Posted by TxGriff

I think it should be expensed immediately. It also should have been classified as some sort of deposit rather than restricted cash previously.

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TXGriff,

Thank you for the response, I appreciate it.

Is there any literature that you could point me to, for support?


Regards,
Herman