A new client has informed me that dilapidations should have been accounted for on a lease hold building.
There is no lease hold or dilapidations on the balance sheet.
Where do I account for the dilapidations for the year end on the balance sheet?
Do I show it separately or can I add it with depreciations and add a note to the balance sheet?
Thank you in advance for any info
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accounting for Dilaps
Hi,
Dilaps are normally capitalised along with leasehold improvements on the balance sheet and depreciated over the minimum lease period. I would take any additional increases to the dilaps provision which do not relate to leasehold imporvements straight to the P&L (repairs and maintenance)
The credit side of the entry would sit in accruals under long term debtors assuming the lease expires in more than one year.
Hope this helps