15 February 2010
Preliminary Expenses are Miscellaneous Assets they can not be said as Deffered Revenue Expenditure as no revenue is generated by the expense in any subsequent period then why do we w/off them yearly in accounts of a company (are they really considered as Deferred Revenue expenditure or they are w/off as it is provided that assessee can w/off them in the Income TAx act)
15 February 2010
Preliminary expenses can be written of in the books of accounts in the year of which expenses are incurred. A note on the accounting policy for write off should be given in the notes to accounts. They are written off over a period of five to be in alignment with the Income Tax Act.
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