Pre operative expenses

what is the treatment of pre operative expenses sir.. pls tell me
Replies (3)
Quick Summary
This discussion clarifies the treatment of pre-operative expenses. According to IAS 38 and INDAS 38, these costs, which include start-up, pre-opening, and pre-operating expenditures, cannot be capitalised. Instead, they must be expensed. The standard provides examples of costs that are not part of an intangible asset's cost, such as those for introducing new products or opening new locations.

They cannot be capitalised but they should be expensed. 

 

IAS 38 and

start-up, pre-opening, and pre-operating costs [IAS 38.69]

INDAS 38 

Examples of expenditures that are not part of the cost of an intangible asset are:
(a) costs of introducing a new product or service (including costs of advertising and promotional activities);
(b) costs of conducting business in a new location or with a new class of customer (including costs of staff training); and
(c) administration and other general overhead costs.

 

I finally found the standard for this after scanning:

expenditure on start-up activities (ie start-up costs), unless this expenditure is included in the cost of an item of property, plant and equipment in accordance with Ind AS 16. Start-up costs may consist of establishment costs such as legal and secretarial costs incurred in establishing a legal entity, expenditure to open a new facility or business (ie pre-opening costs) or expenditures for starting new operations or launching new products or processes (ie pre-operating costs).

https://www.mca.gov.in/Ministry/pdf/IndAS38_2019.pdf

 

I was under the wrong and old concept that start up costs are capitalised. This is new for me as well,

 

 

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
ARTICLESHIP 16 September 2026
Article Assistant

MANUJ SHARMA AND COMPANY

Noida

CA Inter

View Details
Company
15 September 2026
Client-site CA associate

Aditya Muley and Co

Mumbai

CA

View Details
Company
29 August 2026
Chartered Accountant

Velionit Consulting PVT LTd

Mumbai

CA

View Details
Company
24 August 2026
Semi-Qualified CA/CA Finalist - Tax, GST, Audit & Accounts

Bharat Shah & Associates

Mumbai

CA Inter

View Details
Company
16 September 2026
Internal Audit - Team Lead

Consulting & Beyond

Chennai

CA

View Details
Company
21 August 2026
Accountant

A G International

Kolkata

B.Com

View Details
Company
28 August 2026
Assistant Manager

NRS AND ASSOCIATES

Kozhikode

CA Inter

View Details
Company
19 September 2026
CA/Semi-CA/BCom

Pravin Sarvaiya

Mumbai

CA Inter

View Details