profit prior to incorpn pcc

Hello.

Preliminary expenses are those expenses which are incurred for the incorporation of the company.

So these expenses gives benefit to the company and company writes it off over a no of years since these expenses are huge.

Just as like fixed assets...we purchase fixed assets at the time of formation of the company but deduction is allowed only in the form of depreciation over a no of years..similarly with priliminary expenses and they are treated as fictitious assets till not written off.

Regards

Rahul Gupta.

he is right

Thanks friend.........very nice ........now understood..............