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treatment of Pre Operative Expenses

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Querist : Anonymous

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Querist : Anonymous (Querist)
19 March 2010 Respected Sir/Mam

Plz give me the Clarification on Pre Operative Expenses.Luxmi Ind(Parnership Firm) expends the money on diff. ways i.e. for land,building,labour charges for building,Bank Charges, Brokage for rent,salary for adminetc.

Production start Date 01-09-2009.
First Sale invice Date 11.09.2009.

Pls give me solution for expenses for the year Apr08 to March09 and Apr09 to March10.

Thanks in advance...
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jainendra

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jainendra (Expert)
19 March 2010 YOU YOURSELF WILL HAVE TO SOLVE THIS SIMPLE QUESTION.READ IT:
PRE-OPERATIVE:THESE ARE THE EXPENSES(CAPITAL OR REVENUE)WHICH THE COMPANY INCURS UPTO THE PERIOD JUST PRIOR TO COMMENCEMENT OF OPERATIONAL ACTIVITIES.

pre operative expenses of capital nature are to be
capatalised with cost of fixed assets in relaions to which
they have incurred. whereas pre operative expenses fo
revenue are to be charged aganist profits in which year
buisness has commenced.
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CA Ashok Kumar Sahu

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CA Ashok Kumar Sahu (Expert)
19 March 2010 agree
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