Query about preoperative expenses

AS 625 views 1 replies

please tell me what is treatment of pre opertive expenses

(relate it with as-26 intangible asset "para56 and para 6" )

a company which not started business from last 10 years and also no certain evidences are there to start business in near future wheather revenue expenses like audit fees and accounting charges which are not related with any fixed asset are charged to profit loss or capitalized and showed under head non current assets

 

please solve my query because there is a lot of confliction between me and my ca.

Replies (1)

The most important thing would be to see if these provide future econimic benefits. Because this condition of para 6 is only further confirmed by para 56. As far as audit fees and accounting charges are considered they do not provide any future economic benefit and hence, should not be recognised as an asset. 

Please note there were will be various other expenses and attention will have to be paid to the nature of each of them.


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