agreement between the lessee and lessor specifying the lessee's rights to use the leased property for a given time at a specified rental payment. As rental payments are made, rent expense is charged. When the rental is paid in advance, a prepaid rent account (prepaid expense) that has to be allocated into expense over the rental period is recorded. If the prepayment is for a long-term lease, however, it is recorded as a deferred charge and then amortized. The amortization entry for a long-term lease is to charge rent expense and credit leasehold.
tenant's right to leased property. The tenant enjoys certain rights of occupancy, but does not hold claim to the property's title. For example, a tenancy at will, giving occupancy for the term of a lease.
estate in real property of a lessee, created by a lease; generally an estate of fixed duration, but may also describe tenancy at will, a month-to-month tenancy, etc. The value of a leasehold depends on whether the rent is below market and on the length of the remaining lease term.
asset representing the right to use property under a lease.
the interest or estate on which a lessee ( tenant) of real estate has a lease.
Example: Mason possesses a long-term lease on a property. She may obtain a loan with the leasehold pledged as collateral. If the contract rent required by the lease is lower than market rents. Mason's leasehold will have a positive value.
