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Emily2019
Level 1

WHEN DO I START AMORTIZING LEASEHOLD IMPROVEMENTS

My business hasn't opened yet and I incurred expenses classified as leasehold improvements in October  and December of 2018. I will continue to incur leasehold improvements until the end of April 2019. Lease term is 5 years, starting October 2018

 

1) When can I start amortizing leasehold improvements (i.e., 2018 vs. 2019 when the business is open)?

 

2) Do I amortize over the remaining lease term as the expense is incurred? (would that be too many amortization schedule to keep track?)

thanks

1 Comment 1
Rustler
Level 15

WHEN DO I START AMORTIZING LEASEHOLD IMPROVEMENTS

amortization or depreciation does not start until the asset is placed in service (business is operating), until then you accumulate the costs of the leasehold improvement in an asset account.

 

amortization would start on that date, for the term of the lease

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