FRS105 Treatment of Leasehold Improvements

What is the right accounting treatment

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I'm trying to understand how to account for Leasehold Improvements on a property. Lease is an operating lease (15 years), under FRS105.

The FRC guidance for this says:

" Any costs incurred by the lessee (for example costs for termination of a pre-existing lease, relocation or leasehold improvements) shall be accounted for in accordance with the applicable section."

The trouble is, there isn't an applicable section I can see for leasehold improvements. I'm tempted just to capitalise and depreciate over the 15 year life of the lease. Does anyone have any experience with this or insight they'd like to share?


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John Toon
By John Toon
20th Feb 2018 14:15

Have you really checked FRS 105? Last time I checked there was a section on "Property, Plant and Equipment and Investment Property" - section 12 I believe...

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By Arbitrary
21st Feb 2018 11:30

12.20 (d) of FRS 105 appears to apply.

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