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Expenses!

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Querist : Anonymous

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Querist : Anonymous (Querist)
27 July 2010 Dear all

Suppose if a company incurred an expenses say for Rs. 90,000/- for an marketing activity under this activity company collects the data from the market by paying 90,000/- to the promoters (data collectors) in the m/o march'08.....but they will get the results/benefits/business from these data from april,08 onwards..........and company is showing all the exp. of Rs. 90k as prepaid exp. in that F.Y 2008-09 and reversed the whole entry on 1st APril, 2008.

Please answer y the co. is showing this as prepaid exp???
Thanks!
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CMA Ramesh Krishnan

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CMA Ramesh Krishnan (Expert)
27 July 2010 It can be treated as Deffered revenue expenses and charge off over the period of benefits received
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