If a business owns its own premises and they are then used within the business, it is recommended that you establish a separate profit centre for the owned premises and that the owned premises rent space to the business operations and the business operations pay the rent.
This will enable a "proper" accounting to be for the business operating section and for management to be able to determine what the effective return is from ownership of the building.
This paper makes commentary under the following headings:
- Separate Profit Centres
- Owned Premises
- Loans On Building
- Commercial Rent
- Standard Journal Entry For Rent
- Lease Conditions
- Rent From Other Tenancies
- Expenses Relating To Owned Premises
- Profit And Loss Account For Owned Premises
