Have a Finance Question? Ask a Financial Expert Online.
That's exactly right .... The work that was done, that (finally added value) should be capitalized .... and the initial work, if not covered by insurance or reimbursed in some way falls into ordinary a necessary expenses by default, because they did not add value
Would I categorize the original work as Repairs and Maintenance then, and the others as Leasehold Improvements?
Yes, that's correct (just wanted to give you the applying citations there)... The original work can be categorized as original work as Repairs and Maintenance
(sorry or the typo)
Okay, thank you! Just wanted to make sure I was entering these expenses correctly.
You're welcome ... Just keep all the documentation from contractor number 2, especially to document the need to remove orignal work