Accounting treatment - Pre Incorporation Charges
This query is : Resolved
09 April 2010
A company has incorporated 100% owned Subsidiary in Foreign Country. Towards, incorporation the company incurd expenses as Registration Charges and Pre Incorporation charges etc.
The company charged such expenses to P&L A/c. Is the treatment is correct?. If not correct, what is actual accounting treatment in this regard. What are the Statuatory Compliances to establish a Foreign Subsidiary?
The company charged such expenses to P&L A/c. Is the treatment is correct?. If not correct, what is actual accounting treatment in this regard. What are the Statuatory Compliances to establish a Foreign Subsidiary?
12 April 2010
The treatment is absolutely right in view of AS 26.Since the Exp. does not meet the recognition criteria, it must be expensed in the year in which it is incurred.
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