A leasehold is a designation that is assigned to an asset being leased. Under a lease arrangement, the lessee gains the use of an asset that is owned by the lessor for a certain period of time, in exchange for a series of payments. The leasehold designation appears in the accounting records of the lessee, and is most commonly seen as a fixed asset account called "Leasehold Improvements". These improvements are capital expenditures applied to a leased asset, such as building space. The lessee amortizes leasehold improvements over the shorter of their useful life or the life of the lease.

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Accounting for Leases