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Accounting treatment

A/c entries 253 views 2 replies

pavel

student

473 Points Joined July 2009

Hie,

There is a film production house who has started its work from Nov 2016 like research and such like and no income was generated .

From Nov 2016 Till Jan 2019 Only expneses like prodoction and cencership has and will be incurred .On Feb They are goin to sell the movie on Web Platform lik amazon prime, Netflix .

My question is where to show such exp as from Nov 2016 to Jan 2019 . Exp has been incurred and no income is generated so i guess cant be shown in Profit & Loss Account (No matching concept)

Please Guide for such accounting treatment.

Replies (2)

Giridhar S Karandikar

Team Lead

7558 Points Joined November 2011

generally research exp are charged to revenue as per AS26.
now the exp related to other exp also needs to be charged to revenue and loss c/f to next year.
only exp that are incurred prior to starting of business are capitalized and then charged to revenue on a proportionate basis.