Pre-operating Exp
This query is : Resolved
01 September 2008
Can we capitalise pre-operating exp like purchase of food items for pizza outlet -purchased for a trial basis. it includes items like cheese ,butter, sauce ,cutlery& Crockery vegetables etc.,
the amount is very high (approx: 50lakhs)
this is foe opening new pizza outlets.
the amount is very high (approx: 50lakhs)
this is foe opening new pizza outlets.
01 September 2008
hi,
as per the my openion the expense incurred before when plant or project not started commercial production. all expences like trail basis expences, raw materla for that are capitalised.
but when its produce for commercial use than all related expences are revenue expence mot capitallised
so above expenses are pre operating expense for trail basis not for commercial(Sale to customer) so its capitalised.
Mitesh Shah.
as per the my openion the expense incurred before when plant or project not started commercial production. all expences like trail basis expences, raw materla for that are capitalised.
but when its produce for commercial use than all related expences are revenue expence mot capitallised
so above expenses are pre operating expense for trail basis not for commercial(Sale to customer) so its capitalised.
Mitesh Shah.
01 September 2008
Yes, you can. In my opinion these can be treated as defrred revenue expenditure and can be written off over a period of time.
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