Urgent - treatment of preliminary exp.?

This query is : Resolved

J@$preet (Querist)
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05 September 2011 My query is that how should I treat the preliminary expenses in the revised schedule VI?
Whether to write off them 100% or write off them in five yrs equally?
and what should be done with the opening bal. in preliminary exp. that are pending to be written off fully??

Please reply my query its urgent!
thanks in advance!

Jitender

Jitender (Expert)
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05 September 2011 preliminary expenses shall be written off 100% in the first year itself.

J@$preet

J@$preet (Querist)
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05 September 2011 but what should i do , as in previous years i have written off only 1/5th of it, and still 4/5th is pending, as last yr there was no such provision of writting it off 100%.
should i write off the balance 4/5th this year????????

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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02 August 2025 Here’s what you should do regarding the preliminary expenses under Revised Schedule VI:

* Earlier, the practice was to write off preliminary expenses over 5 years (1/5th each year).
* However, as per **Revised Schedule VI (effective from 1.4.2011)**, **preliminary expenses should be written off 100% in the year incurred**.
* Since you have already written off 1/5th in previous years, the **remaining 4/5th should be written off fully in the current year** to comply with Revised Schedule VI.
* This means your Profit & Loss account will have a higher expense this year due to the accelerated write-off.
* For disclosure, you can show the **opening balance of preliminary expenses as a separate line item** and then write off the balance fully.

This treatment aligns with accounting standards and helps present a true and fair view.

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