Handling fixed assets under an office sharing arrangement

Suppose a physician will begin sharing his office space with another physician. They will maintain separate medical practices and will be sharing expenses only. They have agreed on a shared expense arrangement covering monthly office expenses and payroll.  The physician who has the office lease also has very sophisticated office and medical equipment in his office and feels the new physician should pay some rent for the use of his tangible assets. How should this be handled under an expense sharing relationship.

 

In similar arrangements, I have included an "Equipment Usage Charge" in the calculations which is basically writing off the cost of the equipment over its useful life (5 to 7 years) on a straight line basis. You can also call it "rent" if that is more understandable for the physicians. You might want to also add a profit amount to the equipment usage charge the same as you would in an arm’s length lease negotiation.