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treatment of pre incorporation exp

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(Querist)
18 August 2007 A private Co. incurred some exp. before its incorporation.which includes expenses incurred for purchase of materialetc. what accounting treatment & balancesheet disclouser should me made.....
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Munish K Sharma

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Munish K Sharma (Expert)
18 August 2007 Preincorporation expenses will be shown under Misc Expenses and amortised.
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CA Manish Iyer

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CA Manish Iyer (Expert)
18 August 2007 Pre-incorporation expenses to get the company incorporated are called Preliminary Expenses. They are to be fully written off under AS 26 whereas u/s 35D of IT Act, they are to be amortised in 5 years equally thereby giving rise to deferred tax asset.
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Nitesh

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Nitesh (Expert)
18 August 2007 i fully agree with Mr. Manish Iyer
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CA Mani

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CA Mani (Expert)
20 August 2007 I too
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Raj

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Raj (Expert)
20 August 2007 Yes it will create deffered tax assets too
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