Contribution towards Capex

How to treat Capex contribution

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We have taken on a sub-lease of a pub and the leaseholder is providing us with a capital contribution for refurbishments - what's the best way to account for this? I was think of posting it to deferred income and releasing in line with the depreciated assets. Or can I net it off immediately prior to depreciating the assets?

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By paul.benny
09th Apr 2024 12:12

Deferred income and release as other operating income.
Accounting standards generally frown on netting off.

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paddle steamer
09th Apr 2024 14:12

Do take a look at tax treatment . Reverse Premiums (if that is what it is) do need interpreting though these days I am pretty out of date as last textbook was 2019/2020

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Replying to DJKL:
By S_123
09th Apr 2024 16:30

Thanks for this! On a slightly unrelated note, if our solicitor deducted his fees from the first contribution payment, would I recognise the full amount in our accounts or just the net amount?

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