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Hi
We signed a lease that required the landlord to do building improvements (roof construction, floor, exterior facing, etc.) before we take possession of the building.
Per the lease, at end of the project we have to contribute a fixed fee of $100K. The total cost of the project $1M. We were not involved in construction and were not on the hook for rent until all work was completed.
Since the $100K, was not for a specific asset (like an HVAC unit), but instead was a general payment for the whole project, how should i account for the $100K.
I don't believe I can just book $100K as leasehold improvement asset, since that would book a partial asset. Should I instead include the $100K as part of the straightline rent?
Would appreciate any advice.
We signed a lease that required the landlord to do building improvements (roof construction, floor, exterior facing, etc.) before we take possession of the building.
Per the lease, at end of the project we have to contribute a fixed fee of $100K. The total cost of the project $1M. We were not involved in construction and were not on the hook for rent until all work was completed.
Since the $100K, was not for a specific asset (like an HVAC unit), but instead was a general payment for the whole project, how should i account for the $100K.
I don't believe I can just book $100K as leasehold improvement asset, since that would book a partial asset. Should I instead include the $100K as part of the straightline rent?
Would appreciate any advice.
