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amortization rate on leasehold improvements
07-11-2012, 02:55 PM
Post: #1
amortization rate on leasehold improvements
We made some improvements to our office, can we expense the whole thing since we will never be able to recover the costs.
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10-01-2012, 02:19 PM
Post: #2
RE: amortization rate on leasehold improvements
(07-11-2012 02:55 PM)absoranda Wrote:  We made some improvements to our office, can we expense the whole thing since we will never be able to recover the costs.

Leasehold improvements for tax purposes must be capitalized and added to CCA Class 13, and are amortized on a straight line basis over the lesser of the length of the lease and 5 years.

For accounting purposes, if you are following GAAP you also need to capitalize these expenditures, and amortize them at the rate chosen by your company for leasehold improvements (typically 5 yrs straight line).

Determining whether or not to capitalize an item does not depend on whether you will be able to recover the costs - the improvements you made are not current expenditures - they will be used over a period greater than one year, thus they must be amortized over their useful life.
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06-24-2014, 05:01 AM
Post: #3
RE: amortization rate on leasehold improvements
thanks for the info guys. it'll really help me.

dubli
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01-20-2015, 01:39 AM
Post: #4
RE: amortization rate on leasehold improvements
The CCA details for Class 13 (as well as the other classes) can be read on the CRA website at http://www.cra-arc.gc.ca/tx/bsnss/tpcs/r...s-eng.html . The information is very helpful.

Sincerely,
Madan CA
http://www.madanca.com
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