pre-operative expense

My friend i guess u are bit confused between two things:-

1) Pre Incorporation Expenses :- These are in the nature of filing fees, ROC Charges, Stamp Paper Charges, Legal Fees, etc which are incurred before the Company has got into existence (i:e TO GET THE COMPANY REGISTERED AND TO BRING IT INTO EXISTENCE IN THE EYES OF LAW).. It can be in case of both Public and Private Co's.

2) Pre Operative Expenses :- This means ALL Expenses which a Company has incurred before the start of Commercial Activities like Production, etc.. It can also be in case of both Co;s (Public and Private)

I would like to add while pre incorporation expenses (preliminary expenses) can be written off @ 1/5th annually while pre-operative expenses though reflected in balance sheet, cannot be written off.

A HYDRO POWER COMPANY WHICH IS DOING ALL EXPENSES TO INSTALL A PLANT IS ALL COVERED UNDER PRE-OPERATIVE EXPENSES AND I AM NOT TALKING ABT PRELIMINARY EXPENSES FRNDS

Yes My friend, till its First Plant is installed and Starts Functioning ALL EXPENSES (REVENUR & CAPITAL) WILL BE BOOKES AS PRE-OPERATIVE EXPENSES (WHICH IS LATER ON TO BE APPORTIONED OVER THE FIXED ASSETS ON SCIENTIFIC BASIS - needless to say that Depreciation will be allowed on those expenses)

 For Subsequent Installations(like 2nd , 3rd & so on) the Expenses of Capital Nature would be Covered under "CAPITAL WORK IN PROGRESS" (TILL THE TIME PLANT IS INSTALLED & STARTS FUNCTIONING) AND REVENUE EXPENSES WILL BE CHARGED TO PROFIT & LOSS A/C

thanks amir very much you solved my query .. you are rite thanks again

ameer, then what is the accounting treatement for preliminary exp?