In fact, the printers used by small companies are relatively small, but large and medium-sized companies or companies pursuing better quality will buy or rent large printers. Large printers are relatively expensive. What should I do if the machine is upgraded during the lease process?

What does it mean to improve and transform after renting a large printer?

It refers to the renovation of the machine during the use of leased equipment, and the general accounting term is called the improvement expenditure of leased fixed assets.

How to distinguish the expenditure on improvement of rented fixed assets?

The expenditure on improvement of leased fixed assets refers to the expenditure on improvement projects of fixed assets leased from operating leases, and refers to the expenditure on renovation, renewal and improvement in order to increase the utility of fixed assets leased from operating leases or extend their service life. It should not be treated as current expenses, but should be managed as long-term deferred expenses, and manufacturing expenses or management expenses should be amortized in installments during the lease period. In the past, the expenditure on fixed assets improvement projects leased from operating leases was mainly to prolong the service life of fixed assets, with the emphasis on the repair of original equipment. With the intensification of competition among enterprises and the rapid development of science and technology, new technologies, new materials and new processes are increasingly involved in the improvement of fixed assets rented by enterprises in the form of operating leases.

Accounting treatment of expenditure on improvement of leased fixed assets

The accounting treatment of fixed assets improvement expenditure rented from operating lease can be roughly divided into four steps.

1. When the enterprise pays the rent regularly,

Borrow: advance payment-rent of fixed assets

Loan: bank deposit/cash on hand.

2. When the enterprise amortizes the rent every month,

Borrow: management fee-rental fee

Borrow: manufacturing cost-rental fee

Loan: advance payment-rent of fixed assets

3. When the enterprise pays the expenses incurred by various improvement projects.

Borrow: Long-term deferred expenses-expenditure on improvement of leased fixed assets

Loans: bank deposits

4. Calculate the improvement expenditure of rented fixed assets that should be amortized every month.

Borrow: manufacturing expenses-expenditure on improvement of leased fixed assets.

Borrow: management expenses-expenditure on improvement of leased fixed assets

Loan: Long-term deferred expenses-expenditure on improvement of rented fixed assets