Pre Operational Expenses

Pre-operation expenses refers to those expenditure prior to the commencement of operations of the business. In the above case, the company commenced or was incorporated in December 2009. Even though the product launching ceremony was started in March 2010, it is deemed that the business would have started its operation, since it was already incorporated thus acquiring a legal identity.

Thus, pre-operation expenses is to be treated from the date of activities for promotion of business to the actual incorpration of business.