Treatment of expenses

This query is : Resolved

Shekhar (Querist)
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24 February 2012 Hi,
how to treat pre - incorporation expenses made - Like salary paid, rent, petty cash expenses. these are expenses made before incorporation of the company.

Please advice..

Thanks in advance

CA Sunil Anwani

CA Sunil Anwani (Expert)
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24 February 2012 They are to be capitalised and 1/5 of the total expenses can be w/off every year for 5 years.

Shekhar

Shekhar (Querist)
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24 February 2012 is all expenses clubbed together & make a single entry on first day of the company?

CA. Rajesh P. Ahir

CA. Rajesh P. Ahir (Expert)
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24 February 2012 If the other Expanses which has been clubbed are capable of being capitalised than Yas.

Otherwise other expanses has to accounted as Preliminary Exp.