Refurbishment of Premises

Jon Dawson

My client has a property under a full repairing and insuring lease. They have recently undertaken a substantial refurb programme. Could you tell me whether this is posted to profit and loss or does this need to go against the balance sheet?

PGM

I'm sure there will be posts from more experienced people, but;

Anything classed as repairs/renewal/decoration is a revenue cost.

Improvements such as extensions or new facilities are capital, and can go to the balance sheet.

Jon Dawson

Thanks.

I thought that would be right.

deanshepherd

Unless the property was not in a fit state to conduct the trade when the lease was acquired. In which case it may be capital.

PGM

deanshepherd wrote: »

Unless the property was not in a fit state to conduct the trade when the lease was acquired. In which case it may be capital.

Ah yeah that as well. I'm very much a 50%'er