82 – Repairs – Real Estate

Overhead Expenses

 

Synopsis

Account 82

Debits

Credits

  1. The expense incurred in maintaining and repairing both owned and leased property used in the retailer activities.

 

 

Remarks:

Maintenance and repair costs are those which ordinarily do not add to the value or prolong the life of the asset.

Charges to this account should include such items as: repairs to property, painting and decorating, general cleaning, including major cleaning, buffing, sanding, and polishing floors, and losses from glass breakage or damage to buildings (uninsured portion).

Major cleaning and decorating should be expensed at the time it is incurred unless it materially increases the value and prolongs the life of the asset.  If the cost is capitalized, it should be charged to Buildings and Improvements (Account 281) or to Leaseholds (Account 286), whichever is applicable.

The cost capitalized improvements should then be properly listed on a fixed asset inventory and depreciation record, and amortized over the period of life expectancy or the remaining life of the lease, whichever is the lesser period.

Note: