Income earned before commencement of business.
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
13 April 2012
what is the accounting treatment of income earned before commencement of business?
during my audit i observed that co. earned rs.7890000/- huge fixed rate of interest from FDR, before commencement of business.
during my audit i observed that co. earned rs.7890000/- huge fixed rate of interest from FDR, before commencement of business.
14 April 2012
It depends on whether tat interest is earned out of equity funds deposited or loan funds deposited. Also it depends upon whether any project is going on in the company and whether the additional funds for the project are invested in FD or not.
14 April 2012
Irrespective of the accounting treatment, the interest income has to be offered for taxation.
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