How is depreciation on rented/leased fixed assets shown on a balance sheet?
If you Rent a property then no provisions in the balance sheet would be needed. The only transactions in the Balance Sheet should be a Prepayment for the rent If building repairs have been carried out, but not invoiced and they are NOT the Landlords responsibility, then a provision for these costs would be in order. Repairs to rented properties are normally on a lease agreement stating that they are the landlord’s responsibility. Expenses for repairs on properties, which are owned by a company, would be expensed to the P & L as they are incurred. The future decorating again would not be provided for, as it has not been incurred. Incomes and Expenses are ‘matched’ to the same accounting period. See “SAPS” – (statement of standard accounts practises) As for the depreciation, Only Fixed Assets are depreciated. Owned Land or Building are Amortised, not depreciated. Since you are talking about Rent, no amortisation would be required in the balance sheet.
