Leasehold occupier - premises shown as asset on balance sheet

ShaunCope

I'm involved as a volunteer with a local social club. The lease I have seen indicates that the club is the leaseholder/tenant - not owner. However the value of the buildings appears on the balance sheet as a 'fixed asset'. I am puzzled as to why this is the case. Can any accounting professional comment, please? It matters because the club is loss making at present but the inclusion of buildings as an asset means that we have a 'retained surplus.'

davealucas

The accounting treatment is correct, but the value should be written down over the term of the lease