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Amortisation of expenses

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This query is : Resolved

Chitra Nair (Querist)

07 January 2011 Our company is a privately owned one with two major group of family holding the shares (say group A and group B). Recently, group B purchased all the shares of group A and also made a family settlement by giving away the land, building etc. as a consideration. Various cost were incurred for the same like legal expenses, valuation fees etc. The expenses proposed to be amortized equally in the company's books for a period of 5yrs. Our Auditors are now saying that the said costs cannot be amortized in the books and has to be expensed out fully. This would be a big hit to the company's P&L. Please advise me about the treatment of the expenses based on the applicable accounting standard and also the provisions of the Companies Act, if any.

Chitra Nair

Chitra Nair (Querist)

17 January 2011 Dear Experts,

Please reply to the query.
Its urgent.
Thanks in advance.

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