treatment of pre incorporation exp
This query is : Resolved
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.....
18 August 2007
Preincorporation expenses will be shown under Misc Expenses and amortised.
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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