Accounting Treatment of pre-operative Exp.
This query is : Resolved
CA Sanjay Baheti
(Querist)
05 May 2011
One of my client being a Pvt.Ltd.Co. established in 2004.However there were no Business activities till 2010. thereafter the company has set up a plant in 2010 & onwards for Manufacturing facilities which is under instalation stage till 2011.Still the company has not commenced it's commercial production.Now whatever expenses incurred being in nature of Salary,Professional exp,Bank's Loan processing charges and all other Adminstrative expenses has to be capilised under Head the Preoperative expenses or not till commencement of commercial production & then allocated to respective Fixed Assets proportionaly.
whether the same is correct or not as per Companies Act.
whether the same is correct or not as per Companies Act.
05 June 2011
You have to follow AS 10 for this and not companies ACT. Any expenses attributable to asset will be capitalized otherwise charged to PL Account if business decison has been taken only time gap is installation of plant.
Expenses can be claimed after start of business. Start of business has a wider meaning rather than commercial production
Expenses can be claimed after start of business. Start of business has a wider meaning rather than commercial production
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Employee secondment
- Ito add credit side of bank
- Reward for festival
- Clarification on GST, TDS, and Accounting Provisions for Import/Export
- GSTR9 Annual Return
- Clarification on GST, TDS, and Accounting Provisions for Import/Export Commission Agents,profes. ser
- Appointment of Auditor By Form ADT-1
- TDS Return Statement Status
- Rent agreement of House of deceased person
- Rectification under processing even after 6 months cpc portal
- Upload Level ValidationITR3Category of Defect B/D
- Opting out" of regime provided under subsection (1A) of Section 115BAC but Form 10IEA is not filed.
- "Please ensure that the Total of the Deductions u/s 54F match the same in Table D in Sch CG"
- Need to correct "Whether it is last installment " response in Form 26 QB
- " Income from House Property " in joint names of co-owners
- REGARDING TDS RETURN OF FORM 27Q
- Notice under e-Verification Scheme
- GST demand notice for ITC reversal against exempted supply.
- RCM ON SECURITY CHARGES FROM INDIVIDUALS
- How to get money back from delisted company
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
