Please help!! Help!!! Help!!!!

Dear Preeti,

Since Co. has not started it's business that means there will not be any figure in Profit & Loss a/c...

Pre Operative expenses will be carried forward in the Balance Sheet under Misc. Expenditure....

Ya it would be shpwn under miscellaneous expenditure and no effect on profit or loss

But Amir,

While preparing the Balance Sheet and Profit & Loss A/c, we have shown the expenses in Profit & Loss a/c. Now if we do not enter expenses in Profit and Loss a/c of ITR-6, there will be difference.. So what is the way out?  

Dear Preeti,

R u sure Balance sheet & P/L a/c have been prepared correctly.........

What eslse, the total amount of expenses u can show in the columm of disallowances u/s 37(1)..By doing this there will be "Nil" Income under PGBP & consequently NO Carryforwad/ Broughtforward Loss.....

Dear preeti

First we understand journal entries of pre-operative expenses

First entry:  Staff welfare/Travelling exp/ conveyance A/C     DR

                                           Cash/ bank                                                                 CR

Second entry : Pre operative exoenses ( assets)  A/C          DR

                           Staff welfare/Travelling exp/ conveyance                             CR

So here expenditure account nulifiled and no impact of P&L account

The Profit and Loss account have been prepared according to Companies Act. If we do not show the expenses in Profit and Loss account, where should we disclose it? And is the disclosure u/s 37(1) proper? what about the future consequences?

It will not go to P & L A/c. Its has to be under Misc. Expenditure head in Asset side. U cant claim exps until business start. I think there might be some mistake in preparation of BS.

What is effect of AS 26, Accounting For Intangible Assets with regard to pre-operative expenses? Whether to be recognised as assets or to charge to profit and loss account. When you are charging to P& L account the loss will be carry forward in the Accounting Books. 

of course under MISC EXP in assets side of balance sheet,u can write off these kind of preliminary exp only after starting the business.