How to deal with the finance of hotel decoration expenses? How to amortize?

Xiao Li has just joined a hotel as an accountant. At present, the hotel is being renovated, and she feels that it is impossible to start with the financial treatment of the hotel decoration expenses. Today, let's talk about the financial treatment of hotel decoration expenses. How to amortize?

What is involved in the financial treatment of hotel decoration expenses?

The financial treatment of hotel decoration expenses can be divided into two specific situations, as follows:

1. If the hotel property belongs to itself, it belongs to "construction in progress" when it is renovated, and it will be transferred to "fixed assets" after renovation. Details are as follows:

During renovation:

Borrow: Construction in progress.

Loan: bank deposit or cash.

Finished product decoration:

Borrow: fixed assets

Loan: Construction in progress.

2. If the hotel belongs to operating lease, the financial treatment can be divided into two situations, as shown in the following figure:

(1) Assuming that the renovation project is huge and the renovation cost is huge, depreciation is accrued according to the shorter lease period and service life. The accounting entries are as follows:

During renovation:

Borrow: Construction in progress.

Loan: bank deposit or cash.

Finished product decoration:

Borrow: fixed assets

Loan: Construction in progress.

(2) Assuming that the decoration project is not large, it should be included in the "long-term deferred expenses" subject, and the financial treatment is as follows:

Borrow: Long-term deferred expenses

Loan: bank deposit or cash.

Finally, after the hotel is renovated, in the first month of operation, the long-term deferred expenses can be carried forward to the organization expenses under the management expenses at one time. The specific financial treatment is as follows:

Borrow: management fee-organization fee

Loan: Long-term deferred expenses

To sum up, the financial treatment of hotel decoration expenses is different under different circumstances. Make specific choices according to hotel assets.

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How is the hotel decoration expense amortized?

Hotel decoration expenses can be included in the long-term prepaid expenses-decoration subjects for accounting. How to amortize? Details are as follows:

When it happens:

Borrow: Long-term prepaid expenses-renovation expenses

Loans: bank loans/accounts payable and other subjects.

Amortization over a period of not less than three years:

Borrow: management fee-decoration fee

Loan: Long-term deferred expenses-renovation expenses

Should the hotel decoration expenses be included in the cost or expense?

A: Hotel decoration expenses should be included in the expenses. That is, it is included in the long-term prepaid expenses-decoration expenses account.