banner_ad

Very very urgent

Others 845 views 2 replies

 

 

Hello to All,

 

 

                Can you tell me the treatment of Pre operartvive expenditure ? AND can we  apportion the preoprative expenses  to wip building & WIP Medical Equipments  accourdint to weighted average cost?

Replies (2)

Preoperative expenditure would normally comprise of Expenses directly attributable to acquisition/ construction of Fixed Assets, Interest Expense and General Administrative expenditure.

Out of these, Expenses directly attributable to acquisition/ construction of Fixed Assets (which normally do not include Administrative expenses) shall be capitalised as a part of cost of fixed asset. 

Interest cost shall be capitalised if permitted by AS-16.

And all remaining expenses shall be expensed. 

 

Therefore answers to your questions are:

1. Preoperative expenses other than Expenses directly attributable to acquisition/ construction of Fixed Assets and Interest Expense are to be expensed directly. 

2. Preoperative expenses cannot be directly capitalised to Construction WIP on weighted average cost basis as whole of preoperative expenses are not necessarily incurred for acquisition or construction of Asset.

 

Accounting Standards referred: AS-10. AS-16, AS-26

There was a Guidance Note issued by ICAI on Preoperative expenditure which has been withdrawn.

thanks yar...


CCI Pro

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
22 May 2026
U.S. Financial Reporting & Consolidation Manager

Karia Overseas

Ahmedabad

CA

View Details
Company
Featured 02 May 2026
Senior Executive

hitesh chandwani & co

Pune

B.Com

View Details
Company
19 May 2026
Article, CA & Paid Assistant Positions

Aggarwal Sarawagi and Co

New Delhi

CA

View Details
Company
Featured 27 May 2026
Lead Conversion Executive / Sales Closing Executive

SMJ global advisors pvt ltd

New Delhi

B.Com

View Details
Company
14 May 2026
Senior Associate

ABHISHEK SHANKAR AGARWAL & ASSOCIATES

Kolkata

CA

View Details
Company
05 May 2026
Accountant

Sanjay K Pathak & Associates

Noida

Graduate (Any)

View Details
Company
11 May 2026
CA Dropout

Patron Accounting LLP

Pune

CA Inter

View Details
Company
14 May 2026
ICSI Trainees for 21 Months and Semi-Qualified CS

CMNITY HIRE

New Delhi

Others

View Details