I was wondering if you could provide me some guidance in regards to dilapidation costs
my query is can these be classified as exceptional items ?
will appreciate your feedback
thank you
Replies (4)
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On the other hand if a tenant pays dilaps at the end of lease they may merely be paying repairs that they ought to have paid during the currency of the lease.
Possibly you ought to consider why they arise:
1. If merely making good routine repairs (painting every three/five years etc) then why are they exceptional?.
2. If making good because tenant improvements require removed there is more of an argument they are exceptional.
Having said that accounts disclosure was never my strong suit.
For the avoidance of doubt
I said that they can, not that they should be, treated as exceptional. As DJKL suggests, it will depend ...
To understand why it is called Exceptional Cost would help you decide, should you treat it as Exceptional or as normal expense.
An exceptional cost is an unusually large and uncommon transaction charge that must be disclosed on the financial statements in accordance with GAAP. Remember consistency..