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Need to amortize leasehold improvements done last year over the term of the lease. Do I amortize monthly ?

Hi everyone,

 

We have 18k of leasehold improvements booked in april 2018. It was for electrical wiring that we got done here at the office. It's been sitting on the balance sheet since we did and I want to start amortizing it. We signed the lease in November 2017 and moved into the office in December 2017. Our lease term is 84 months. I did the math and if I divide the 18k by 84 I get around ~$214 per month. Since we didn't get to amortize in 2018, I want to catch up on it this year. I was under the impression that amortization is done on a yearly basis but since the term is 84 months which is 7 years and we booked the improvements in April of 2018 that means the term of the lease from that date is 80 months which is an  uneven amount of years. I want to know what the best practice is when it comes to amortizing something like this. Should I amortize from april 2018 through august 2019 on a monthly basis ? Should I continue to amortize on a monthly basis until the balance is fully amortized? I was just confused on how to amortize when the amount of time is uneven in terms of years. Thanks, sorry if that was confusing. 

 

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Established Community Backer *

Re: Need to amortize leasehold improvements done last year over the term of the lease. Do I amortize monthly ?

Leashold improvements are amortized over 39 1/2 years.  If the lease expires before them and is not renewed, you write off the balance when you vacate.