CA.Varalakshmi.M (Manager-Finance) (482 Points)
18 May 2012HI FRIENDS,
How do we deal with pre - operational expenses of a company.
One of my clients had incorporated a business in 2005 but they started commercial production in 2011-12.In the mean time they have incurred many expenses twds salaries,Printing & stationery ,Travelling and other regular expenses.
My query is how we deal with above mentioned expenditure.
Is there any institute guidence material explaning on above situation.
Please suggest me.
Thanks in advance.
C.A. Sandeep Wawhal
(Chartered Accountant PGDFM BCom.)
(1823 Points)
Replied 18 May 2012
Actual expenses incured before commencement of business can be charged as pre-operating expenses to the profit & loss account.
C.A. Sandeep Wawhal
(Chartered Accountant PGDFM BCom.)
(1823 Points)
Replied 18 May 2012
Actual expenses incured before commencement of business can be charged as pre-operating expenses to the profit & loss account.
CA.Varalakshmi.M
(Manager-Finance)
(482 Points)
Replied 18 May 2012
R u sure? I heard we should capitalise those expenses in the year in which we commence business
alok
(student)
(41 Points)
Replied 19 May 2012
it should be written off in the year of production as per revised AS-26. There is no concept of defferement of revenue expenditure now.
CAclubindia
