writing off preliminary expenditure
This query is : Resolved
16 November 2010
dear sirs,
in my case a company was formed in 2002 and preliminary expenditure incurred during the year 2002 is shown under head miscellaneous expenditure for writing of in the forthcoming years. but after the introduction of AS-26 preliminary expenditure should be written off as an when incurred. whether the unadjusted amount of preliminary expenses can be completely write off in the year 2005 or it is to be written off over a period of years.yours valuable advice is expected
in my case a company was formed in 2002 and preliminary expenditure incurred during the year 2002 is shown under head miscellaneous expenditure for writing of in the forthcoming years. but after the introduction of AS-26 preliminary expenditure should be written off as an when incurred. whether the unadjusted amount of preliminary expenses can be completely write off in the year 2005 or it is to be written off over a period of years.yours valuable advice is expected
16 November 2010
AS 26 deals with Intangible/Research preliminary expenses. So you continue with existing Company law provisions for the company formation expenses.
16 November 2010
You may completly write off in 2005
17 November 2010
My understanding is the balance amount outstanding is to be written off in full since AS-26 has been notified as part of the Companies (Accounting Standards) Rules,2006 in order to comply with section 211 (3C) of the Companies Act,1956.
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