Leased premises and equipment in your accounts

Why a gym's premises lease and leased machines are more than a rent bill, who keeps the lease register, and how owned equipment is depreciated.

By Achekam · 11 October 2026 · 5 min read · For Fitness businesses in South Africa, Nigeria, Kenya

Most gyms do not own the building they train in. The floor space is leased, often for years, with an escalation clause and a deposit. The treadmills, bikes and cable machines may be leased too, through a finance or rental agreement with the supplier. Each month a few bills arrive, and they get paid like any other.

That is how it feels from the front desk. In the financial statements, a long lease can look quite different from a monthly bill, and getting it wrong distorts the gym's assets, liabilities and profit in ways that matter to a bank, a landlord or a buyer. This article explains why, who keeps the lease records in Achekam, and where owned equipment fits.

More than a monthly rent bill

Under IFRS 16, the leases standard in full IFRS, a lessee generally brings a lease onto its balance sheet: an asset for the right to use the premises or equipment, and a liability for the payments it has committed to. The monthly payment then reduces the liability, and the asset is used up over the lease. Smaller businesses that report under IFRS for SMEs look to Section 20 of that standard for leases instead.

Which standard applies to your gym, and how each lease is treated under it, is a judgement for your accountant. What you can see from the outside is why it matters: a gym with a long premises lease has a real commitment that a bare list of rent bills does not show. The IFRS Foundation's summary of IFRS 16 explains the single lessee model, under which lessees recognise assets and liabilities for leases longer than twelve months unless the underlying asset is of low value.

For a gym, leases usually come in three kinds:

• The premises: the largest and longest, often with escalations, renewal options and a deposit.
• Equipment on a finance or rental agreement: cardio machines, racks or a whole fit-out from a supplier.
• Smaller items: a coffee machine, a water dispenser or a music system on a rental contract.

The lease register your accounting firm keeps

In Achekam, the lease register is a tool for accounting firms. Their staff can keep a client's lease register under IFRS 16 or under IFRS for SMEs Section 20. A gym therefore works with its leases through the firm it appoints, rather than keeping the register itself.

To set that up, the gym appoints its accounting firm by the firm's Achekam address or firm code, choosing the role (accountant, auditor, tax practitioner, payroll provider or adviser) and an access level, and the firm accepts or declines. The access level matters here:

• Bookkeeping access covers the accounting, but not the gym's users, settings or payment gateways.
• Review access is read-only.

A firm that will post lease entries needs more than review access.

Contract details checked by a person

Leases are long documents, and the figures that drive the accounting are scattered through them: the start date, the term, the payments, escalations, options to renew, deposits. Achekam can produce an AI draft of a lease read from the contract, but that draft is not used until a person confirms it, and every number the AI reads must appear in the contract text.

That safeguard only works if the firm has the whole contract. Before year-end, send your accountant:

1. The signed premises lease, with every addendum and any renewal letter.
2. Each equipment finance or rental agreement, including the schedule of payments.
3. Any side letter about rent-free months, fit-out contributions or deposits.
4. Notes of anything agreed verbally with the landlord that has not been put in writing yet, so the firm can ask for it.

Entries posted straight into your own ledger

An appointed firm works directly in the gym's own ledger, with no copy made. Whatever lease entries the firm posts appear in the gym's own accounting screens, beside the bills you capture.

That makes coordination simple but important. The landlord's monthly invoice is usually captured as a supplier bill, line by line with VAT, and a bill without a purchase order waits for approval before it posts. Agree with your accountant which account those rent bills go to, so the bills and the firm's lease entries do not count the same payments twice. A short note in your month-end routine ("rent bill captured, lease entries left to the firm") avoids most of the confusion.

A worked example in words: a gym signs a premises lease and a separate agreement for its cardio machines. The owner uploads both contracts to the accounting firm. A staff member at the firm reads the AI draft of each lease against the contract and confirms it. The firm posts the lease entries into the gym's ledger. Each month, the gym's bookkeeper keeps capturing the landlord's and the supplier's invoices as bills to the account agreed with the firm.

Owned equipment in the fixed-asset register

Equipment the gym buys outright belongs in its own fixed-asset register. A business can add assets at cost, depreciate them monthly by straight line or reducing balance with a journal each month, and dispose of them with the profit or loss posted.

Two practical points:

• Group sensibly. One asset per significant machine makes disposals easy when a treadmill is sold or scrapped; a single asset for a batch of dumbbells is usually enough.
• Tax is separate. The register does not work out tax wear-and-tear, so your accountant handles the tax allowance outside it.

When the gym replaces old machines, trading in gym equipment covers how the old asset leaves the register. And if your fixed costs are under review alongside the leases, paying instructors per class looks at the other large monthly commitment most studios carry.

Who does what

Leases are one of the few areas where a gym's books need an accountant's judgement, not just good capture. Hand over every contract, agree where the monthly bills go, and let the firm keep the register in your own ledger.

General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.