Allocation of pre-operative expenses
This query is : Open
09 December 2011
What should be the basis for allocation of pre-operative expenses at the time of first time capitalisation.
1. Total expenses incurred on accrual basis
2. Cash expenses incurred (total exp-creditors)
3. Total expenses+allocated interest on term loan taken for the purpose of capital expenses
4. Any other basis if any.
1. Total expenses incurred on accrual basis
2. Cash expenses incurred (total exp-creditors)
3. Total expenses+allocated interest on term loan taken for the purpose of capital expenses
4. Any other basis if any.
09 December 2011
Preoperative expenses are those which are connected with the actions that are required for start up of operations. Preoperative expenditure can therefore be capitalized by apportionment/allocation to assets which are subject matter of operation.
for example operating assets are:
Plant & Machinery RS 100
Equipments RS 50
Lab Rs 25
Preoperative expenses are RS 70
Rs 70 is to be apportioned to the above assets in the ratio of 4:2:1
for example operating assets are:
Plant & Machinery RS 100
Equipments RS 50
Lab Rs 25
Preoperative expenses are RS 70
Rs 70 is to be apportioned to the above assets in the ratio of 4:2:1
Message likes :
1 times
10 December 2011
Dear Mr. Beldona your reply is not clear about the basis that will be used for define the ratio.
10 December 2011
Dear Mr. Beldona your reply is not clear about the basis that will be used for define the ratio.
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
- TDS 194-T applicability
- Fixe term employment
- Is any professional CA is here please reply
- GST ITC REVERSE
- Section 50-fixed asset-->building ceases to exist
- Foreign lottery ticket bought online from India: legality, tax and consequences
- Gift Received from nonblood relative
- Putting a heading on received mail
- Consolidated financials
- Reprocessing of rectification order AY 2025-26
- Regime change
- Goods sold but invoice not issued
- Tally: Imported bank entries do not show up in manual reconciliation
- Sales of goods of amount Rs97 lakhs to a party
- Confused About My Career After 12th — Cyber Security, AI or Finance? Need Guidance
- STATUTORY AUDIT OF A SMALL PRIVATE COMPANY INCORPORATED ON 28.03.2025
- Guidance Needed: Linking Multiple Form 26QB Payments and Responding to ITD Defaulter Notice
- How to pay remaining amount of TDS after due date?
- Resigning a auditor from the company for misconduct
- RCM @ 5% on Hamali charges, Transport Charges, Unloading charges we take ITC or not
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
