is Preliminary expenses recorded at the expenditure side of 'Capital Account' in Double account system or general balance Sheet?
is it a capital expenditure or deferred revenue expenditure? I have read some articles, where it is considered a capital expenditure and recorded at the expenditure side of capital account, but the book I am using doesn't include preliminary expenses in capital account and it is recorded in General Balance sheet only.
Preliminary expenses act like both nominal and capital accounts because-
these expenses are expensed to P&L if they are not falling under PPE & nominal in nature
tgese expenses are capitalised if they fall under PPE and hence related to capital expenditure
it is not deferred revenue expenditure because it is not waiting for goods and services but just to start a company
finally, the books of capital record transactions once the business starts.... these expenses occur before th business starts..
Gupta Sachdeva & Co. Chartered Accountants
New Delhi
CA Final
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