Pre incorporation Expenses

This query is : Open

Shyam Lal Naik (Querist)
Follow

10 April 2011 Dear Experts,

Before, incorporation of a company, some expenditure has been incurred, in addition to normal preliminary expenses like preparing MOA & AOA etc.

What is the Accounting Treatment ?

What is the compliance requirements under the Companies Act ?

Kindly favour with your reasoned reply.

Rgds,

SL Naik

CA KRISHNA KUMAR DARUKA

CA KRISHNA KUMAR DARUKA (Expert)
Follow

11 April 2011 AS 26 dealing with intangible assets covers preliminary expenses as well. The period over which these preliminary expenses are to be amortised is best left to the judgment of the directors of the company. AS 26 suggests writing off intangible assets over a period of 10 years, though a different period is permissible if it is justified in the opinion of the management. It is a common practice to write off these preliminary expenses in a period of five years, though there is no legal provision to this effect. A company can as well write off its preliminary expenses in the same year as it incurs.

Message likes : 1 times

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now

Summarize this with AI

ChatGPT Perplexity Claude Google AI Grok

Similar Resolved Queries

Unanswered Queries

Popular
Recent

Trending Online Classes

Direct Tax Laws & International Taxation May 26,Sept 26 & Jan 27

CA Arvind Tuli

Enroll Now
Audit Fast Track Recorded Batch For May 26,Sept 26 & Jan 27

CA Aarti Lahoti

Enroll Now
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English

CA Bhanwar Borana & CA Shubham Keswani

Enroll Now

view all classess

Meet our CAclubindia PRO Members

MURALIKRISHNA EDDANAPUDI

Ashutosh Purohit

K.S. ANANTHARAJAN

Rasheed Mohd Abdul

Ravi

Subscribe Now

Pre incorporation Expenses

Similar Resolved Queries

Trending Online Classes

Meet our CAclubindia PRO Members

Quick Links

Browse by Category

Latest Job Openings

Article Assistant

GST CONSULTANCY

CA Final

Manager- Finance and Compliance

Accountant

GST CONSULTANT