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Chintan Patel

Chintan Patel (Querist)

15 December 2011 why does misc expenses like discount on shares issued appear on the asset side of the balance sheet?

CA. RICHI SAXENA

CA. RICHI SAXENA (Expert)

19 December 2011 Such Expenditures have already been incurred by the enterprise so there remains no liability on the company to pay for these expenditures whether in the next financial year or in the future years.As such these expenses are not a liability for a company to be carried forward so they are not shown on the liability side. Now these expenses are already made and are being carried forward so at present they are not reducing the profits or in other case are not increasing losses of the company thereby benefitting the company for the current year and they will again be deducted in future in installments only so they will benefit the company in the future as well. so they are considered assets for a company.

CA. Richi Saxena

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