12 October 2009
Asset created by an accounting entry (and included under assets in the balance sheet) that has no tangible existence or realizable value but represents actual cash expenditure. The purpose of creating a fictitious asset is to account for expenses (such as those incurred in starting a business) that cannot be placed under any normal account heading. Fictitious assets are written off as soon as possible against the firm's earnings.
13 October 2009
These Assets are not assets which are tangible and visible like buildings machinery computer but the expenditure on some activity which is considered as a Capital expenditure instead of Revenue expenditure. When expenditure incurred amount is not debited to Profit and Loss A/C but shown as Fictitious asset and over a period the amount is writtenoff or debited to Pand L account. For example Share issue expenses by a Corporate This is not debited to P& L A/c in the year in which it is incurred but debited in instalments as decided by Management over few years.
CAclubindia
