My business leases the building we inhabit. We have quite a bit of money capitalized as leasehold improvements. We purchased the building. How do we account for those improvements on BS and IS.

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Originally Posted by inoh

My business leases the building we inhabit. We have quite a bit of money capitalized as leasehold improvements. We purchased the building. How do we account for those improvements on BS and IS.

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I would have expected you would have already capitalised and depreciated the leasehold improvements. If you have written them off then a revaluation of the building will absorb the improvements

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Originally Posted by paraclete

I would have expected you would have already capitalised and depreciated the leasehold improvements. If you have written them off then a revaluation of the building will absorb the improvements

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Thanks you for the reply. The leasehold improvements were about 1/2 depreciated when we decided to purchase the building. Should we writeoff the remainder of the book value to depreciation expense or other, such as loss on retirement/disposition of fixed assets?