Accounting of increase in authorised capital

This query is : Resolved

pradeep gupta (Querist)
Follow

10 July 2008 Can any body tell me whether increase in authorised capital is preliminary exp or share issue exp? whether such classification will make any difference?

Also please tell me about writting off the preliminary exp & pre-operative exp. I am bit confused because as per AS 26 & Guidence note on Misc Exp it is to be written of in year in which incurred & as per judgement of some experts it can be written off as 1/5.

Rajesh Kumar Gupta

Rajesh Kumar Gupta (Expert)
Follow

11 July 2008 Expeses for Increase in Authorised Share Capital is Neither a Preliminary exp nor share issue exp.
Fees for increase in Authorised Share Capital is Charged as revenue expense because ROC fees are revenue in nature.

Preliminary exp are not covered by AS-26