We are coming to the end of the lease for a few of our warehouses, in the next 2 years, and we have had the dilapidations reassessed. There are 2 figures provided on the report - one being the contractual claim (how the landlord's surveyor would see their client's claim), the other being the estimated settlement which is subject to both the landlord and tenant intentions and the landlord's ability to demonstrate loss. As you would expect the contractual claim is considerably higher. Currently, it is unlikely that we will exit these sites so it may just roll over. However, in terms of what we should provide (company policy is 50% of the final year's rent) would our auditors deem it essential that we need to provide the contractual claim amount?
4th Jul 2022
Accounting treatment of dilapidations assessments
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