Question
There have been different interpretations on the use of the Outright Method and Spread-out method of recognizing income from leasehold improvements. Most especially to the
There have been different interpretations on the use of the Outright Method and Spread-out method of recognizing income from leasehold improvements. Most especially to the Outright Method. Some would say that you recognize already the fair market value of the improvement at the time of its completion. But others would say that you need to recognize the depreciated value of the property at the end of the lease term since this is the total value of the improvement which will be still enjoyed by the lessor (this is the same value as the one being used in spread-out method.) To your understanding and careful study, which is the best option or the most realistic option?
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