Preliminary Expenses
This query is : Resolved
CA Harsha.M
(Querist)
19 May 2008
One of the company is having retail outlets throughout India. The company has opened a new outlet in a major City in India.
The expenses prior to opening of the outlet has been accumulated in accounts in a Seperate account "Project Expenses".
The company has accumulated the same for 2 Yrs. And transferred all the expenses to the new branch account when it was opened.
In relation to this kindly let me know:
1) Whether the Project Expenses accumulated is to be treated as preliminary Expenses or
2) Project Expenses which has not been claimed in the Previous years has to be treated as "Prior period Expenses"
The nature of Expenses include:
1) Purchase of Furniture
2) Purchase of Computers
3) Conveyance
3) Staff Welfare Etc
The expenses prior to opening of the outlet has been accumulated in accounts in a Seperate account "Project Expenses".
The company has accumulated the same for 2 Yrs. And transferred all the expenses to the new branch account when it was opened.
In relation to this kindly let me know:
1) Whether the Project Expenses accumulated is to be treated as preliminary Expenses or
2) Project Expenses which has not been claimed in the Previous years has to be treated as "Prior period Expenses"
The nature of Expenses include:
1) Purchase of Furniture
2) Purchase of Computers
3) Conveyance
3) Staff Welfare Etc
S.Srinivasaraghavan
(Expert)
19 May 2008
What is the nature of expenses that have been accumulated? The doubt arises because of duration.
CA Harsha.M
(Querist)
19 May 2008
CA Harsha.M
(Querist)
19 May 2008
........
Late CA Sampat Jain
(Expert)
21 May 2008
FURNITURES AND COPUTERS ARE CAPITAL EXPENDITURE AND SHOULD BE TREATED AS SUCH .
Conveyance and staff welfare are prior period expenses.
Conveyance and staff welfare are prior period expenses.
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