prelimenary expenses
This query is : Open
saurav agrawal
(Querist)
08 December 2016
what is treatment of prelimenary expenses according to scedule 3 and new AS....
if in trial balance if prelimenary exp is 5000 and in other information 1000 rs is given as writeofff.
then what we should do
CA Suresh Jain
(Expert)
08 December 2016
AS 26 deals with intangible assets ;preliminary expenses are also an intangible asset. The period in which preliminary expenses are to be amortised can be decided by the judgment of the directors of the company. As per AS 26 suggestion it is a period of 10 years , it is not biding , a different period is permissible if it is justified in the opinion of the management. Company can write off preliminary expenses in the year it starts activity. Company can add the Preliminary expenses in the Fixed assets in the ratio of cost of the assets also
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