Commencement of business

Hi,

I have a doubt regarding commencement of business

 

A, a public limited company, incorporated in April 2009,

They have appointed staff for their operation, taken building for its business, incurred various expenses like, travelling, salary, business promotion, telephone, production, etc.

 

But, actually they got Certificate of Commencement of Business only in September 2009.

 

Pls help me , how will account the aforesaid expenses

 

is it possible to incure expenses from the incorporation itself or whether only after commencement.

 

Is it not possible to account without commencement of business certificate, how will account the expenses incurred after incorporation till obtaining commencement certificate.

 

Awaiting an expert advice

 

Mohammed Salih K

Replies (4)

to the best of my knowledge i agree with you that a company cannot incure  any expense before certificate of commencement of business so the same shall not be allowed as business expense and i think it can be treated as preliminary expense.

but not 100 % sure about the same........

Shalih- expensed prior to incorporation is preliminary expenses and shall be amotised in the year of commencement of business (here year of commencement of business means actual commencement and not yr of getting certificate of commencement).

exp incurred after incorporation will be fully allowed as business expenditure and will be accounted accordingly. certificate of comencement will have to do nothing with the accounting.

This is my personal opinion. Others views solicited

Thanks Mr. Santosh for informing about the same.

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