Where is a company building listed in the balance sheet?
July 18, 2020 | 30,00 EUR | answered by Steuerberater Knut Christiansen
Two spouses are joint property owners and shareholders of a business (limited partnership). The property was not contributed to the company or transferred to the company in the land register.
On the property there is a building that is used 100% for business purposes and is currently being extensively renovated for business purposes, increasing its value.
My questions are:
1. How is the increase in value of the building treated in the accounting? Does it fall under "buildings on own land" or "buildings on third-party land"?
2. Are the original building value and the share of land and soil special business assets of the company?
Good day,
the property (land and buildings) represents special business assets of the partners as a whole and would also need to be included in the balance sheet here. Depreciation and any other expenses (e.g. interest) can therefore be claimed as special business expenses here.
If there are no contractual agreements, the renovation costs are considered business expenses at the level of the special business assets. The costs could therefore be claimed here. The overall profit of the partnership will be reduced because the tax result is determined from the total balance sheet as well as the special balance sheet. If something new is created, for example through expansion, the costs would need to be shown as production costs for the new asset in the special balance sheet and depreciated.
I hope this answers your questions, if not, please feel free to contact me with your follow-up questions.
Best regards,
Knut Christiansen
Tax advisor
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