A client, a limited company, has recently taken on a 10 year lease for their new office. Included in the completion payment was a large amount for a rent deposit + VAT (an amount to cover the VAT that would be charged if the rent deposit was ever drawn down on which is when the tax point would be created). The deposit is held by the agent or agents solicitor in a separate client account.
What's the correct accounting treatment of the deposit - is it prepaid rent or an asset, an "other debtor".
Edited at 28 Jun 2017 05:54 PM GMT
Edited at 28 Jun 2017 05:55 PM GMT
Edited at 28 Jun 2017 06:48 PM GMT