are mr mohd. atiq jo amount amortised karte he wo p & l me dikhate he
aur thanks mr. p sreenivasulu aap ka answer acha laga muje aur icai me mene ye question dala tha uska muje ye answer mila k wo log next edition me change kare ge
Dear student, The revised Schedule VI does not contain any specific disclosure requirement for the unamortized portion of expense items such as share issue expenses, ancillary borrowing cost and discount or premium relating to borrowings. The existing Schedule VI required these items to be included under the head “Miscellaneous Expenditure.” AS 16 Borrowing Costs alludes that ancillary borrowing cost and discount or premium relating to borrowings could be amortized over the loan period. Further, share issue expenses, discount on shares, ancillary cost-discount-premium on borrowing, etc., being a special nature item are excluded from the scope of AS 26. Keeping this in view, certain companies have taken a view that it is an acceptable practice to amortize these expenses over the period of benefit, i.e., normally 3 to 5 years. The revised Schedule VI does not deal with any accounting treatment and the same continues to be governed by the respective accounting standards/ practices. Further, the revised Schedule VI is clear that additional line items can be added on the face or in the notes. Keeping this in view, we believe that companies can disclose the unamortized portion of such expenses under the head “other current/ non-current assets”, depending on whether the amount will be amortized in the next 12 months or thereafter. Also if we carefully read the definition of current asset i.e An asset shall be classified as current when it satisfies any of the following criteria: (a)it is expected to be realized in, or is intended for sale or consumption in, the company’s normal operating cycle; here bu consumption, we can interpret that the benefits consumed by an expenditure over the years. On this basis, it will fall under the category of current assets. For preliminary expenses, as per para 56 of AS 26 it should be write off in the year it is incurred. necessary corrections in this regard will be made in the study material in next edition.