Writing of preliminary expenses

This query is : Resolved

Share Report Follow Query Ask a Query

Querist : Anonymous

Querist : Anonymous (Querist)

09 June 2015 Why are we doing preliminary expenses writing off instead of whole amount debited of p&l A/c?

CMA MALHAR BEHERA

CMA MALHAR BEHERA (Expert)
Follow

10 June 2015 Accounting for preliminary Expenses:

The benefit of the preliminary expenses is long-term so it is treated as intangible asset as per AS-26 and shown in Balance sheet under Misc. assets. These expenses will be written off in 5 equal year installment in profit and loss A/c. You can also transfer whole amount in single year but for income tax purpose 1/5 of the amount will consider.

Accounting Entries:
1. Preliminary Expense - Dr (Current Asset)
To Cash\Bank

2. Preliminary Expenses Written Off - Dr (Indirect Expenses)
To Preliminary Expenses

3. Profit & Loss A\c. - Dr
To Preliminary Expenses(1/5th)

Querist : Anonymous

Querist : Anonymous (Querist)

10 June 2015 Thank you very much sir. Is it matching Concept for Writing off?

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now

Similar Resolved Queries

Unanswered Queries

Popular
Recent

Trending Online Classes

Direct Tax Laws & International Taxation May 26,Sept 26 & Jan 27

CA Arvind Tuli

Enroll Now
Audit Fast Track Recorded Batch For May 26,Sept 26 & Jan 27

CA Aarti Lahoti

Enroll Now
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English

CA Bhanwar Borana & CA Shubham Keswani

Enroll Now

view all classess

Meet our CAclubindia PRO Members

siddhesh satardekar

ARUP BHATTACHARYA

venkatesh c

KANHA ASSOCIATES

Raj Jaggi

Subscribe Now

Writing of preliminary expenses

Similar Resolved Queries

Trending Online Classes

Meet our CAclubindia PRO Members

Quick Links

Browse by Category

Latest Job Openings

GST CONSULTANT

Manager- Finance and Compliance

Accountant

Senior Executive

GST CONSULTANCY

CA Final