one company not started commerical activity and hence profit and loss a/c is not prepared. i have capitalised all expenditure and grouped as expenditure during construction period.. but i come to know that icai has withdrawn this guidline.. so wht i can do??
can i grouped under expenditure during construction period is correct??
25 February 2011
1) Revenue expenditure can be grouped in preliminary expenses a/c and pre-operation a/c respectively. 2) Capital expenditure ,other than identifiable fixed assets, may be grouped under the account "Capital work in progress".
15 March 2011
Now that the GN is withdrawn and AS-26 is applicable you cannot adopt those old archaic methods... Anything to be carried in the balance sheet should have future economic use...
So direct expenses and expenses attributeable to construction activities should be taken to FA / CWIP while pure admin expenses should be charged off to P/L immediately... The concept of deferred revenue expenditure or expenditure pending allocation is no more relevant..
CAclubindia
