In one company incurred expenditure before opening branch these expenditure like salaries, stipend, advertisement,Interest on loans, rent, security charges etc. these expenses are capitalised at the time of opening branch and the same is transferred to assets like furniture, plant and machinary etc is this procedure is correct if yes please give me source about the same
Menu
preoperative expenses
Replies (2)
Pre-Operative expenses of Capital Nature are to be capitalised with the cost of fixed assets in relation to which they have been incurred. Whereras pre-operative expenses if Revenue Nature are to be charged against the profits of the company in they year in which business has commenced.
Hi
Check out the guidance note issued by ICAI in this regard
GN on expenses during the construction period.
Recent Threads
- ITR-2 Payment Made but Status Not Updated
- Need help for ITR filing
- ITR Updated returns. Time limit for filing
- ITR 2 Processed and Refund Credited to Bank
- Freelancer or Salaried
- LTCG Tax & Indexation on Debt Mutual Funds Sol
- Section 45(5A) and 194IC with carry forward of tds
- Paid tax amount, CIN generated and challan downloa
- INTRADAY INCOME PRESUMPTIVE INCOME
- Clarification on Deemed Export Status for EOU-to-E
Related Threads
CAclubindia
