Leasehold Improvements

Accounting Terms Dictionary

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Leasehold Improvements

If a lessee makes permanent improvements to a property, the improvements are called leasehold improvements.

John rented a store and put in free standing shelves and a new sink. The new sink is a leasehold improvement because when John stops renting the store he cannot take the sink with him. John can depreciate the sink even though it is permanently attached to property he doesn’t own.

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