if a tenent did capital expenditure on building & claim depreciation on the same & if he vacated property during the year then what should be the treatment of remaining balance of expenditure in the hands of tenent?
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Quick Summary
This discussion addresses the accounting treatment for capital expenditure made by a tenant on a leased property. If a tenant claims depreciation on improvements and vacates the property mid-year, the remaining balance of the expenditure needs to be accounted for. The general consensus is to write this off to the Profit & Loss account as a loss on disposal of a fixed asset. It's also advised to seek compensation from the landlord, which would reduce the amount written off.
It will be obviously written off but you must surely ask the landlord for compensation. in such case the amount written off will be reduced by the amount compensated by the landlord.
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