Accounting Tools

OCTOBER 5, 2023

A triple net lease is a leasing arrangement in which the tenant or lessee is responsible for paying all of the costs associated with a leased asset. When there are multiple lessees in a property, a tenant must also pay its share of the maintenance on common areas, usually based on a proportion of square footage leased.

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Accounting Tools

JULY 28, 2023

Related Courses Accounting for Intangible Assets Fixed Asset Accounting Property Management Accounting Real Estate Investing The lessor of a property may grant an allowance to a lessee that is to be used to improve the leased property. Related Articles Depreciation of Leasehold Improvements How to Account for Leasehold Improvements

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Accounting Tools

SEPTEMBER 20, 2023

The lessor allows a lessee to use the property in exchange for periodic rental payments. A leasing arrangement is defined in a lease agreement, which can include a number of special terms, such as the ability of the lessee to extend a lease or to buy the leased asset at a bargain price. A lessor is the owner of leased property.

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Accounting Tools

JUNE 21, 2023

Related Courses Fixed Asset Accounting How to Audit Fixed Assets How to Depreciate Leasehold Improvements A leasehold improvement is created when a lessee pays for enhancements to building space, such as carpeting and interior walls. Otherwise, the lessee can record the expenditure in the leasehold improvements asset account.

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Accounting Tools

MARCH 11, 2024

Depending on the terms of a lease agreement, the lessee may reimburse the lessor for any executory costs incurred by the lessor, or the lessor may take responsibility for these costs. Related AccountingTools Course Accounting for Leases Related Article Lease Accounting

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Accounting Tools

FEBRUARY 23, 2024

Another example of an onerous contract is when a lessee is still obligated to make payments under the terms of an operating lease , but is no longer using the related asset. Related AccountingTools Courses Accountants' Guidebook GAAP Guidebook Related Articles Estimated Liability Examples of Liabilities Indirect Liability Provision

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Accounting Tools

JUNE 18, 2023

The right-of-use asset is a lessee's right to use an asset over the life of a lease. An exception is when it is reasonably certain that the lessee will exercise an option to purchase the asset, in which case the amortization period is through the end of the asset’s useful life.

Accounting 40

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Accounting Tools

MAY 10, 2024

Includes the cost of all improvements made to property being leased by the company as the lessee. Related Articles Asset Classification Examples of Assets The Difference Between Assets and Liabilities Types of Assets Includes the cost of all land owned by the business. This account is not depreciated. Leasehold improvements.

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Accounting Tools

JULY 11, 2023

This can result in the following adjustments: Any increase to the asset’s sale price is accounted for as a rent prepayment Any reduction of the asset’s sale price is accounted for as additional financing provided to the seller-lessee by the buyer-lessor. Related Articles How to Account for Leasehold Improvements Lease Accounting

Accounting 40

Accounting Accounting 40

Accounting Tools

OCTOBER 3, 2023

Example of a Recurring Invoice For example, a landlord may issue a rent invoice to its lessees every month, while a maintenance company may charge a fixed monthly fee to its customers to review and update their air conditioning systems.

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Accounting Tools

MAY 16, 2023

When the lessee enters into a leasing arrangement, it pays a fixed periodic fee to the lessor. The lessor may also charge the lessee for other fees incurred to acquire and hold the underlying asset, such as personal property taxes. The lessee only records a lease expense in each period, in the amount of the payment made to the lessor.

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