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This query is : Resolved

Shivani (Querist)
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01 June 2010 Many times, we see that many companies which are in startup stage i.e. during construction period and before it is ready for commencing commercial operations do not prepare Profit and Loss Account for the year / period and the total expenditure incurred during such year / period is kept under the head "Pre-Operative Expenditure, pending allocation"
or it is treated as preliminary expenses

Shyam Lal Naik

Shyam Lal Naik (Expert)
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02 June 2010 Ofcourse. These expenditure can be in the nature of Capital Expenditure or Deferred Revenue Expenditure.

On completion of the startup stage, the capital expenditure are required to be allocated/apportioned to various assets. The deferred revenue expenditure can be written off spanning a number of years.

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