81 – Amortization – Leaseholds
Overhead Expenses
Synopsis
Account 81
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Remarks:
Leasehold improvements are normally construed to mean those improvements of a permanent nature that add value and/or life to rented or leased property.
Leasehold improvements should be amortized over the expected life of the improvement, or the remaining period of the lease, whichever is less, and according to IRS regulations.
A premium paid for a lease should be amortized over the term of the lease.
It is recommended that the dealer obtain outside accounting and tax counsel to aid him in establishing proper accounting and amortization of leaseholds.