No Operations but P & L ?

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sanath (Querist)
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07 September 2009 A company has been newly incorporated in India which, in the previous year has not commenced it's operations. Since operations have not yet begun, a P & L A/C needn't be prepared.
However, w.r.t Preliminary Expenses/Pre-operative expenses, are we required to preprare a P & L and write off the same, or can we carry it forward to the Balance Sheet.
Please quote relevant sections in this regard.

KRISHNA KUMAR R C

KRISHNA KUMAR R C (Expert)
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07 September 2009 Company neednot prepare its P&L a/c as it is not started its operations.You can show the preliminary expenses/pre-operative expenses in Balance Sheet under the head Misc. Expenditure.

sanath

sanath (Querist)
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07 September 2009 Can you please be more precise.

Sreedhar Atchutuni ACA,GradCWA

Sreedhar Atchutuni ACA,GradCWA (Expert)
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07 September 2009 No need to prepare P&L a/c, we have to prepare Statement of Expenditure.

This statement of expenditure contains Preliminary expenses and Pre operative expenses seperately.

These have to be shown in B/S under Misc. expenses.

Preliminary exp. are to be written off in the first year of Commercial Operation and Pre operative expenses are to be Capilalized.

sanath

sanath (Querist)
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07 September 2009 Do you think is this in conformity with AS-26?, where we are required to write off all intangibles.

Sreedhar Atchutuni ACA,GradCWA

Sreedhar Atchutuni ACA,GradCWA (Expert)
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07 September 2009 yes,

Preliminary exp. is a deferred revenue exp./ misc exp. but not intangible asset.

we are discussing about misc exp but not intangible assets.

CA CHINTAN AJMERA

CA CHINTAN AJMERA (Expert)
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07 September 2009 Agree

sanath

sanath (Querist)
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07 September 2009 Subscribers to the memorandum still have not paid all amount due as on the date of closure of financial statements.
How does this get disclosed in the Balance Sheet?