Discussion:Reimbursed leasehold Improvements from another company?
From TaxAlmanac, A Free Online Resource for Tax Professionals
Note: You are using this website at your own risk, subject to our Disclaimer and Website Use and Contribution Terms.
From TaxAlmanac
Discussion Forum Index --> Accounting Questions --> Reimbursed leasehold Improvements from another company?
| 27 May 2009 | |
| I would like to know how to report reimbursed leasehold improvements from one company to another company. A little background... Company A, a manufacturer, distributes its product to Company B, a retailer. Company A would like Company B to display its product in a certain way. Company B makes all the nessesary leasehold improvements to satisfy Company A's request. Company A then reimburses Company B for the full amount of expenses. Should the reimbursement be shown as income, should the amount to be reimbursed be held in a liability acount untill received, or niether?
Hint. The landlord is not involved with this transaction. | |
| 28 May 2009 | |
| You're giving us a "hint" ? What is this, your accounting homework? | |
| 28 May 2009 | |
| I'll give you a hint. There is an EITF for consideration given by a vendor to a customer including a reseller. Your answer lies in that EITF. | |
| 29 May 2009 | |
| The "hint" was more of a clarification rather than an actual hint. Most of the research I have done deals with reimbursements from a landlord to a renter and I could really care less about that. Just trying to avoid questions about it with a slight sense of humor. Next time I’ll try to tone it down for you Trillium. | |
| 29 May 2009 | |
| Durwood, we get a lot of the college crowd around this time of year, what with examinations around the corner. Therefore, the experts here have to keep a sharp eye out for these tender shoots (greenhorns) to keep them from flying under the radar.
Then too, a lot of us here are basically accustomed to working with a Company A. When you go and throw a Company B into the mix, that's really something that you should ask the Big Four. If there is still a Big Four. | |
| 1 June 2009 | |
| EITF 01-9 Accounting for Consideration Given by a Vendor to a Customer should have the answers for that scenario. | |
| 2 June 2009 | |
| EITF 01-9 discusses issues regarding the accounting for the vendor. I am trying to figure out what to do on the customer's books. Example 11a - Payment for Custom Fixtures explains the situation I am in best. The problem is that my client would be considered Chain in the example not Company I and there is no guidance on how to report the transaction. | |
| 8 June 2009 | |
| Maybe try some of the lease guidance. Unresearched - I would think that you capitalize the leasehold improvements (dr leasehold improvements cr vendor incentives) and then depreciate the improvements and amortize the credit to COGS over the life of the improvements. That is generally consistent with other guidance for leasehold improvements. GAAP loves gross ups. | |
To join in on this discussion, you must first
log in.
