Profit or loss prior to incorporation

Audit is conducted for the period which includes both Pre-Incorporation as well as Post Incorporation periods.

So it logical to apportion the expense in the time ratio.

Other comments on this matter are wel-come for clarity

agree with abhijeet deshpande.......

Only company can incur audit expenses that’s why it is purely a post incorporation expense just like share issue expenses.

But it in case of Audit Expenses, it can be allocated in TR as audit is for the full year and not only for post-incorporation period..

Leaving a proper note for the same is preferable in the exam.

Its advisable to leave a note on the way you treat it if you come across any confusion in the exam.

It will treat as TR Exps. ..