09 December 2011
What should be the basis for allocation of pre-operative expenses at the time of first time capitalisation.
1. Total expenses incurred on accrual basis 2. Cash expenses incurred (total exp-creditors) 3. Total expenses+allocated interest on term loan taken for the purpose of capital expenses 4. Any other basis if any.
09 December 2011
Preoperative expenses are those which are connected with the actions that are required for start up of operations. Preoperative expenditure can therefore be capitalized by apportionment/allocation to assets which are subject matter of operation. for example operating assets are:
CAclubindia
