Treatmentof trial run exepnditure
This query is : Resolved
21 August 2012
The Assessee has commenced Manufacturing Activity in Jan 2012 and incurred trial run / and pre production expenditure up to March 2012 .
There was no Sales during that period only expnditure incurred .
Trading a/c: 50 Lacs Closing Stock : 60 LAcs
Trading Exps : 10 LAcs
Indirect Exps
Salary and
OTher Administrative Epxs : Rs 15 Lacs
Now my query is that what accounting treatment i shall have to made for indirect expendutre of Rs 15 Lacs in the books of Manufacturer ?
please advice
Thanks
The Assessee has commenced Manufacturing Activity in Jan 2012 and incurred trial run / and pre production expenditure up to March 2012 .
There was no Sales during that period only expnditure incurred .
Trading a/c: 50 Lacs Closing Stock : 60 LAcs
Trading Exps : 10 LAcs
Indirect Exps
Salary and
OTher Administrative Epxs : Rs 15 Lacs
Now my query is that what accounting treatment i shall have to made for indirect expendutre of Rs 15 Lacs in the books of Manufacturer ?
please advice
Thanks
22 August 2012
All the expenditure incurred before commencement of production should be treated as capital nature.
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