We’re looking to lease a shop space that has a certain hardware installed. The landlord is specifically stating those items will become or property but there is no money changing hands for those items. They are heavy items of hardware particular to the type of business we’re running (large gas cookers, fridges, freezers, etc).
It’s a condition that we take these items on, and because they are useful to us, that’s not an issue. These are not small ticket items and combined their value would be in excess of $15K. They will become assets from day 1 and will immediately add value to the business, but have no value that I can think of that would be recorded in manager. ie, they’ve never been an expense.
Entering them as fixed assets doesn’t seem to be right since they have no purchase price and/or accumulated depreciation. Or do they have a purchase price that is automatically depreciated at the time of handover?
The problem as I see it, they aren’t an expense or a depreciative object as far as any tax would go, but they are a part of the assets of the business and have an intrinsic value.