A dropped ceiling installed in a leased space by a tenant is classified as?

A dropped ceiling installed in a leased space by a tenant is classified as a leasehold improvement because it is a modification made to a rental property to enhance its usability or aesthetic appeal for the tenant's purposes. Leasehold improvements are typically considered the tenant's property for the duration of the lease agreement, as they are alterations or improvements made to the existing structure.

This classification is important because leasehold improvements can affect the value of the property and may be accounted for differently in terms of taxation and depreciation. The distinction emphasizes that while these improvements are physically attached to the building, they were specifically installed to serve the needs of the tenant, and thus are treated as an asset related to the leasehold interest rather than as part of the real property itself.