Related to priliminary expenses current treatment in books

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Querist : Anonymous

Querist : Anonymous (Querist)

16 October 2013 What is treatment of priliminary Expenses in companies & others book.Please confirm me.your's Balram

CMA. CS. CA (Final)Santosh Jha

CMA. CS. CA (Final)Santosh Jha (Expert)
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16 October 2013 As per companies act preliminary expenses to be written off in the same year but as per income tax act it is to be written of in 5 years.

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)
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16 October 2013 Preliminary exp is to be amortized over a period of 5 years as per AS 26.

@VaibhavJ

@VaibhavJ (Expert)
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16 October 2013 Agree with experts!!

CMA. CS. CA (Final)Santosh Jha

CMA. CS. CA (Final)Santosh Jha (Expert)
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16 October 2013 Mr Tushar what you are saying is as per income tax but as per companies act it is to be wfritten off in the same year. Please go through the M.P. Vijay Kumar's Financial Accounting Book.

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CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)
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16 October 2013 Pls refer to AS 26 it clearly mentions that it must be written off in 5 years.

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Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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16 October 2013 As per para 56 of AS 26 preliminary expenses do not qualify to be an intangible asset. Hence ,such expenses should be written off in the year of occurrence for accounting purpose.

For taxtion purpose section 35D can be applied.

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Ganeshbabu K

Ganeshbabu K (Expert)
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18 October 2013 Preliminary expences can be written offin our books in the year of occurance,,
.
.
however for income tax purpose 35D can be applied

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