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    inoh's Avatar
    inoh Posts: 2, Reputation: 1
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    #1

    Mar 3, 2016, 06:50 PM
    Accounting for Purchase of Building w/leasehold improvements
    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.
    paraclete's Avatar
    paraclete Posts: 2,706, Reputation: 173
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    #2

    Mar 3, 2016, 10:59 PM
    Quote Originally Posted by inoh View Post
    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.
    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
    inoh's Avatar
    inoh Posts: 2, Reputation: 1
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    #3

    Mar 4, 2016, 01:18 PM
    Quote Originally Posted by paraclete View Post
    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
    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?
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