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Can previous year written off expense can be written back

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Naveen Kumar

Job seeker

23 Points Posted on 16 August 2012

Hi,

I need a clarification regarding the below mentioned Issue very urgently.

A company started for a project and expended some amount for the same in FY 2010-11 and due to some reasons the approvals for the project is not received and all the expense is written off to P&L in same year treating it as revenue item.

Now in FY 2011-12 they have obtained Approvals for the Project and Restarted the Project Work with already laid Base in FY 2010-11.

Now can the company capitalise the amount that it has witten to P&L in FY 2010-11 in the FY 2011-12 and what is the treatment in the books for the same.

Replies (1)

ravi kumar s

student

72 Points Posted on 20 August 2012

the expenses incurred on project is a kind of deffered expenditure .

so it will be shown on the asset side under the head miscallaneaous expenses.

and then whenever the amount is recovered then only you can write off the amount. otherwise you can't write off the whole amount completely in one year.