Preliminary expenses treatment

Should be disclosed in 'Other Current Assets' under the heading Current Assets.

As per revised schedule VI

Preliminary and Per-operative expenses is to be shown under

Current Assets -> Other Current Assets

Presenation would be as under

Balance at the begiining of the accounting year      XXX

Add: Addition during the year                                         XX

Less: written off during the year                                    XX (as debited in P/l, if any under the head extra              ordinary items)

Balnce at the end of the accounting year                  XXX

Hi Apporva

Are you sure it would be  under "other current assets".

As i had one article published in our journal  relating to diff between old and revised schedule where in it was mentioned that revised schedule was a move towards  IFRS. and one of the difference was that Preliminary expenses would be now directly written off in P & L in the year of expense so as to follow IFRS. 

Read the attached article.

As per the AS-26 revised, normally preliminary exp. are written off, unless they meet some crieteria to be recognised as assets. Hence try to write off the preliminary exp. fully in the year in which they are incurred.

as per revised shedule vi ,preliminery expenses should be shown under profit and loss a/c for better understanding of a normal person because if it is shown in balancesheet then a normal person will understand as profit,hence if your client is agree for this writeoff of preliminery expenses then shown under profit and loss a/c otherwise will shown under other current assets.

thanks and regards

Originally posted by : CA Roshan Jha
	As per the AS-26 revised, normally preliminary exp. are written off, unless they meet some crieteria to be recognised as assets. Hence try to write off the preliminary exp. fully in the year in which they are incurred.

Agree with Roshan Sir