How do you account for leasehold improvements you are paying for until the work is completed and you are ready to start amortizing? I will be getting invoices in soon for the work as it's done and I'm not sure what type of account it goes to - seems like it should go to a WIP then moved to leasehold improvements when it's done or just book it directly to leasehold improvements and don't amortize until it's finished? Any ideas? Thanks.
Leasehold Improvements in Progress
Answers
It should be debited directly to leasehold improvement, or to leasehold improvement in progress account, and should not be mixed with WIP. account ,
WIP account is generally for revenue earning items work in progress.
You debit Leasehold Improvement and you start amortize it over the life of the lease when the work is completed.
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Would this be subject to the company capitalization limit?