Accounting for renovation escrow account

Rob bertaboy at gmail.com
Tue Nov 3 00:37:41 EST 2015


On Wed, Oct 28, 2015 at 7:47 AM, David Cousens <davidcousens at bigpond.com>
wrote:

>
> You would normally setup up an Expense:Renovation account, and as you pay
> for expenses out of your business checking account, you would have a
> transaction which is a debit for the amount to that expense account and a
> credit for the same amount to your checking account (i.e the 2 splits of
> the transaction).
>
> When you reimburse your checking account from the Asset:Bank :Escrow
> account, the transaction will consist of a debit of the reimbursement
> amount to your checking account and a credit for the same amount to the
> Asset:Bank:Escrow account.
>

IANAA, but is there any particular reason why the expenses wouldn't be
captured via depreciation?  My understanding is that the renovations would
have a shelf-life of more than a year and thus increase the equivalent of a
building account for fixed assets.  You would then determine the life of
the renovations and depreciate using whichever schedule is appropriate.


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