Hi
Cafe client has moved into new premises..... paid over £15,000. Property was already running as a cafe , leasing of local council paying monthly rent. Client not kept any of fixtures etc so 15k is for purchase of lease only.... Not come across this before -asset?? Help please.....
Cath
Replies (3)
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Cafe purchase
Surely this should be treated as a goodwill purchase and capitalised and amortised accordingly???
Cafe purchase
Hi
The lease should be treated as a capital item, shown on the balance sheet and amortised over the respective period
You may want to consider if any actual consideration passed for items of equipment that remained on the premises at the time of purchase
A worthwhile consideration is the respective apportionment that would allow the business to operate as a cafe!!