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Where is 'Preliminary expenses' recorded in Double Account System?

Others 772 views 1 replies

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.

Replies (1)

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.. 


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