Pre operative expenses
This query is : Resolved
shivani verma
(Querist)
16 April 2015
Pl advise me accounting treatment of pre operative expenses (both of capital and revenue nature) in detail.
16 April 2015
Greetings Shivani,
An expense which is pre operative can only be capitalised if their is a probabiity that the asset can generate future economic benefit.
So the treatment would be , since it is an expenditure...
Asset A/c
To Bank/Cash
Asset A/c would be that asset for which such expense have been made
..
If there is no expectation or any future benefit , then it has to be trasnferred to P&L account.
An expense which is pre operative can only be capitalised if their is a probabiity that the asset can generate future economic benefit.
So the treatment would be , since it is an expenditure...
Asset A/c
To Bank/Cash
Asset A/c would be that asset for which such expense have been made
..
If there is no expectation or any future benefit , then it has to be trasnferred to P&L account.
shivani verma
(Querist)
16 April 2015
thanks a lot... can u please suggest me any AS or guidance note or any other link which i can show to my seniors..
16 April 2015
Greeting Shivani,
Yes to the limited knowledge i have, i am sure that A.S 26 should help you with this especially if i am not wrong Para no 51-57 , u could refer to.
U may use thank button to convey your appreciation
Yes to the limited knowledge i have, i am sure that A.S 26 should help you with this especially if i am not wrong Para no 51-57 , u could refer to.
U may use thank button to convey your appreciation
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16 April 2015
I am closing the thread since the query is resolved
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