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Preoperative expenses

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(Querist)
14 April 2016 what is the treatment for revenue expenses when commercial production has not commenced ? Do we have to capitalise it under preoperative exepenses under current assets or to be charged in profit or loss account ?
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Sandeep Garg

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Sandeep Garg (Expert)
14 April 2016 These expenditures need to be charged off in P&L.
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KAVIRAJA ADDANGADI

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KAVIRAJA ADDANGADI (Expert)
14 April 2016 Pre production can be capitalised and set off as pre operative expenses.
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Sandeep Garg

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Sandeep Garg (Expert)
15 April 2016 Every company is required to prepare P&L even if the production not started. Pre operative expenses if not directly related to construction of Fixed asset (Tangible / intangible) need to be charged off.
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