Expenditures before commencement of manufacturing

This query is : Resolved

Guest

Guest (Querist)

31 August 2012 I would like to know how to treat Capital Expenditures like Computers & Cars purchased during the pre operation period i.e before manufacturing commences.Now manufacturing has started and accounts have to be maintained how do i treat all these pre operation period expenditures in Accounting

CA RICHA BADALIA

CA RICHA BADALIA (Expert)
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31 August 2012 Pre operative expenses would be treated as capital work in progress.Once operations of the company is started, capital work in progress would be transferred to respective fixed asset account and you can claim depreciation accordingly.