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capitalisation of leasehold plot rent

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07 August 2009 a company is holding leasehold plot and has paid a part of lease rent as lump sum and is paying the rest annually.Although it has not yet amortised the lump sum amount of lease rent paid initially. is this accounting treatment in accordance with accounting practice?
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Abhishek Mohta

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Abhishek Mohta (Expert)
07 August 2009 If a land is taken on Lease the lease rent for the total period will be capitalised and on the periodic basis will be charged to P&L A/c.

Again the security deposit will be shown separately in the Balance Sheet on the Asset side.
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