Leasehold Improvements

Leasehold improvements are modifications or additions made to a leased property by a tenant to better suit their business needs, such as installing partitions, lighting, or fixtures. These improvements enhance the space but typically remain property of the tenant for the duration of the lease. Once the lease ends, the tenant may need to remove some improvements, unless they are considered permanent. Accounting-wise, these costs are capitalized and amortized over the lease term or the useful life of the improvements. Essentially, leasehold improvements tailor a rented space to an occupant's specific requirements, while adhering to lease agreement terms.