Capitalise a lease

Capitalise a lease

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We have a company that wants to lease a building. We have the quarterly lease figures; how is the lease capitalised?

Many thanks, Gerard.
Gerard King

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By La BoIS Saint
25th May 2007 15:34

Costs to be capitalised
You might capitalise costs associated with the lease i.e. stamp duty, legal fees and amortise over the lease term but you wouldn't normally capitalise it as a finance lease (unless rentals are more than 90% etc)

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By Euan MacLennan
24th May 2007 09:58

Why do you want to capitalise it ?
A lease of a building is almost undoubtedly an operating lease and you simply charge the rent paid as an operating expense spread over the period of the lease.

Or am I missing your point?

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