Accounting treatment of preliminary exp

yes preliminary expenses are the expenses of the company ,once it get incorporated and accepts the liability of the expenses.they relate to the expenses that had been incurred by the promoter towards bringing the company into existense.hence it should be recognised as preliminary expenses and the company is supposed to be bearing them.

now since it is not revenue in nature,as it is not related to a particular year they shall be treated as deferred revenue and shall be shown under the head miscellaneous expenses(schedule VI) and shall be amortised over the years to the profit and loss account. 

the entry shall be as under---

           Preliminary expenses a/c    Dr.      XXX

                      To Director/Cash a/c                     XXX

based on the facts and circumstances amortise the total amount over the years to the profit and loss account.

yes ofcourse the amount of preliminary expenses would not be the liability of the compnay until the company has come into existence..and as the comp comes into existence it rattifies the preliminary expenses and hence from then onwards it becomes the liabilty of the company