Capiatlising Pre opertaive expenses with Fixed Assedt

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

09 June 2011 Dear sir

in one my clients accounts, pre operative expense of Rs 12000 was capitalised along with fixed assets and depreciation was charged on the total amount in the next years.
is'nt it wrong?
how should we treat it?

Pankaj Gandhi Jaiswal

Pankaj Gandhi Jaiswal (Expert)
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10 June 2011 As per AS 26 if this expenses is not allocable to FA as per AS 10 then fully write off in the same year when it is incurred

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Querist : Anonymous

Querist : Anonymous (Querist)

10 June 2011 Thanks sir.. But it is Prov for Audit fees for previous year. this has been capitalised. should it not be w/o as revenue in same year. if it has not been w/o in tht yr nor in the next yr. what should we do now?

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Pankaj Gandhi Jaiswal

Pankaj Gandhi Jaiswal (Expert)
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10 June 2011 Actually it should be written off in same year if not then next year if not then write off in this year...and show as prior period expense

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Querist : Anonymous

Querist : Anonymous (Querist)

11 June 2011 Thank you sir
your guidance is highly appreciated