leasehold improvements

  

Definition

Improvements performed on a leased property, such as additions, alterations, remodeling, or renovations.

For accounting purposes, all leasehold improvements are capitalized (recorded as an asset with a corresponding liability) and amortized over the remaining life of the lease term or the life of the improvement (whichever is shorter). Upon termination of the lease, such improvements normally become the property of the owner (lessor) without any cost or obligation.


Use this term in a sentence

  • After the irresponsible tenants moved out, the apartment's owner had to make many leasehold improvements to fix the damaged walls and floors.

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