Preliminary expenses before commencement of business operations

Any expenditure incurred before commencement of operation in the business is called as Pre-operative expenditure.Hence whatever rent, electricity etc. expenditure are incurred before commencement of operation of business should be initialy debited to p/l account.However as and when operation get commenced these pre-operative expenditure needs to be capitalized in the ratio of fixed assets held on that day.

I understand you are referring preliminary expenses and not preoperative expenses. Preliminary expenses in nature of electricity or rent paid should be charged to reserves and surplus.

Further it should be noted that preliminary expenses in nature of ancillary borrowing cost, discount or premium relating to borrowing (under AS 16) and share issue expenses, discount on shares being special nature items are excluded from AS 26 and its business practise to amortised this expenses over the period of 3-5 years. These expenses should be shown under "other current/non current assets" under revised schedule VI.