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Car lease deposit treatment

  • Member
  • Practice Licence
  • 11 posts
  • # 119129

Evening

 

A question regards the treatment of car lease deposit

 

We pay a deposit of say£1500 for a new leased car over a term of 3 years.  And then onging  monthly rental of £400  for the lease again ongoing for three years. 

 

Am I correct that the deposit should be treated as a pre payment and the cost spread over the three years,  or as our new accountant said it should be expensed immediately as a sunk cost?

 

If anyone can help i would greatly appreciate it

 

Many thanks

 

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