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Profit & loss mandatory?

Others 390 views 1 replies

Pranav Nagar

Manager

71 Points Joined December 2011

I have just come across an Auditor's Report whereby, he has certified that "No P&L Account has been drawn, since the commercial oparations of the Company have not commenced and thus all expenses are capitalised".

The Company in question has made expenses in the tune of 15-20 Cr. which includes Depriciation.

I would be obliged if anyone can confirm if this correct or not. If yes, under which Act / Law / Standard is this allowed. Also the same if it is 'not allowed'.

Thanks

Replies (1)

Shivashish

Chartered Accountant

2796 Points Joined November 2011

The company was required to prepare p&L..as the expense need to be presented in PL only.. Refer Revised Schedule VI of companies act 1956 which are mandatory for companies. Even in which seperate head of certain crucial expenses are given.