pre incorporation expenses

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rramashis mishra (Querist)
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21 July 2011 expenses incurred towards temporary office in a hotel before incorporation of the company-whether to be capitlized or to be expensed off?

C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
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21 July 2011 Which type of hotel expenses? If it related with the company formation then it is to be capitalised otherwise no deduction will be available if it is of personal nature.

Amol Gopal Kabra (CA,CS,DISA)

Amol Gopal Kabra (CA,CS,DISA) (Expert)
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21 July 2011 It has to be capitalised.

Akhil Agrawal

Akhil Agrawal (Expert)
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21 July 2011 It has to be capitalized. These are pre incorporation & not pre commencement Exp. Mr Agrawal is tlking from Income tax Point of view

rramashis mishra

rramashis mishra (Querist)
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22 July 2011 Thanx a lot for ur reply.....

I just went through AS 26..where it is said that these type of expenses (preliminary expenses)fail to meet the definition of an asset and hence need to be expensed off when incurred.

I m confused...plz help me out...

rramashis mishra

rramashis mishra (Querist)
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22 July 2011 Agarwal Sir,These expenses are not of personal nature...