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
Replies (2)
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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)
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?