08 July 2013
A private ltd companies is being formed in F.Y 11-12 but no operation is being started. In F.Y 12-13 manufacturing operations in being started form August month i.e purchase and other Manufacturing process. So in this case should we add the expenses incurred during period 1-4-2012 to 31-7-2012 in pre-operative expense or we should expense it out in P/L.
Expenditure which has been incurred during the year,11-12 and 01.04.2012-31.07.2012,is required to be capitalize to the total assets on total cost basis.
14 July 2013
Dear What you understand with per-oprative expenses Means those capital expenses incurred before commercial production. it may be case of expansion.
purchasing of raw material related to production is not pre-oprative expenses
CAclubindia
