Hi All. My limited company owns a building and in order to access my rear garden, one needs to walk on the neighbour's land. My neighbour agreed to give my building a right of way, and this was formalised legally through a Deed of Easement Grant. The Deed is for 5 years. I paid a one-off sum (premium) of £5,000 on completion and I pay £500 annually. Other parties have a right of way over the same land, and have respective agreements with the neighbour.
I am unsure as to the accounting treatment of the one-off sum of £5,000. I am aware with Leases, the tenant should capitalise the one-off premium paid on completion and amortise it over the term of the lease. But, this isn't a lease - I am not the only party using the land and my right of way can be terminated by the neighbour, with 6 months' notice.
Any thoughts? Thanks.