Title: Leasehold improvement definition — AccountingTools
Headings: 
Leasehold improvement definition
What is a Leasehold Improvement?
Accounting for a Leasehold Improvement
Related Courses

Content: Leasehold improvement definition — AccountingTools
April 18, 2021
Leasehold improvement definition
April 18, 2021
/ Steven Bragg
What is a Leasehold Improvement? A leasehold improvement is a customization of rental property. Examples of leasehold improvements are new carpeting, cabinetry, lighting, and walls. A tenant may want to invest in leasehold improvements in order to adjust the characteristics of office or production space to its specific needs. The landlord may pay for these improvements in order to improve future lease rates for the rental property. Accounting for a Leasehold Improvement
In accounting, a leasehold improvement is considered an asset of the tenant if the tenant paid for it, the investment exceeds the capitalization limit of the tenant, and the improvements will be usable for more than one reporting period. If so, the tenant records the investment as a fixed asset and amortizes it over the lesser of the remaining term of the lease or the useful life of the improvement. Upon termination of a lease, all leasehold improvements become the property of the landlord. Related Courses
Fixed Asset Accounting
How to Audit Fixed Assets