If I am renting an office space and the landlord tells me that it is ok to renovate, but it will be at my expense (Costing about 2000). How would I enter this transaction. Could it be just maintenance and repairs for the amount of the Renovations?
Keep in mind I am giving examples, and your renovations may be different. Any physical changes, eg. drywall torn down, new carpets, doors moved, new drop ceiling, painting, new bathroom, new security system, sign on the outside, landscaping, repaving parking, new electrics, new cabling for phones or computers etc, you can book to an Other Assets type of account called Leasehold Improvements. You can amortize the improvements. In Canada you may amortize them over 7 years. YOu will have to look into leasehold amortization rules in your jurisdiction.
Check with your accountant.
You have received a couple of differing opinions, but the fact is, you are correct. Small amounts (and that would include a $2k renovation) should be expensed in the current period as repairs and maintenance. For incidental amounts, this is the appropriate treatment.
Scraps has a Newfoundland email address. Amortization of leasehold improvements in Canada is straight-line over the term of the lease plus one renewal, minimum 5 years. I don't know where the "7 years" comes from. Most accountants (that I know) consider leasehold improvements to be a fixed asset, not "other".
As was suggested previously, relatively small amounts are usually expensed rather than capitalized. Of course "relatively small" is a relative term!
Depends on what was done.
In the US the depreciable period for Non-Residential Real Property is 39 years.
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