ADVERTISMENT EXPENDITURE INCURRED BY A PRIVATE LIMITED COMPA

Sir, as per my knowledge, we can treat the total advertisement expenditure (including TDS paid on the advertisement) as Pre-operative expenditure. These are shown in the head of Miscelleneous expenditure not written off in the Balance sheet.

I presume that the co. must have commenced business after dec 2009 and if the adv expenses is incurred after commencement of business it can be charged to P/L in both cases refer Sec 37 and AS 26

Dear Manish, The preoperative expenses is Limited to precribed expenses only. I think advertisement expenditure doesn't cover in those. So Income Tax Act allows the full expenditure but As far as companies act is concerned u can treat is as deferred revenue and u can Account it considering AS rules 2006.