1. The renovation cost of the factory building under operating lease, if the amount is not large, can be directly included in the current profit and loss:

Debit: manufacturing expenses, etc. (Included in related subjects according to the department to which the expenses belong)

Taxes payable-VAT payable (input tax)

Loan: bank deposit (or accounts payable, etc.). )

2. The amortization period of the workshop renovation fee for operating lease exceeds 1 year. When expenses are incurred:

Borrow: Long-term deferred expenses-expenditure on improvement of leased fixed assets

Taxes payable-VAT payable (input tax)

Loans: bank deposits

When amortizing decoration expenses:

Debit: manufacturing expenses, etc. (Included in related subjects according to the department to which the expenses belong)

Loan: Long-term deferred expenses-expenditure on improvement of rented fixed assets

Long-term prepaid expenses refer to the expenses that the enterprise has spent, but the amortization period exceeds 1 year (excluding 1 year), including the improvement expenses of rented fixed assets, the major repair expenses of fixed assets with amortization period exceeding 1 year, and stock issuing expenses. The loan interest and rent that should be borne by the current period shall not be treated as long-term deferred expenses.