Share Issue Expenses

this is miscallaneous exp.

to be recorded in asset side of balance sheet

not to write off completely from p/l

..

Treatment of share issue expenses are outside the scope of AS 26, hence it can be carry forward and can be written off over period of three years as per industry practice. It can be shown as misscelaneous expenditure under application of funds in balance sheet side. However, the treatment of same under income tax depends on nature of share issue expenditure. if it is initial expenditure for new company, it is allowed over period of five years as per section 35 d of the Income tax act. Since amortisation may be different under normal account and tax account, it may give rise to deferred tax. However for subsequent expendituer on share issue of existing company, it is not allowed under income tax and no deferred tax will be created on the same.