Pre-Operative Expenses

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Prasanna Bhat (Querist)
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24 September 2008 In the previous year if the company has apportioned the expenses as Pre-Operative. As the company shut downs it operations how do we treat pre-operative expenses now pls let me know.

Ravikumar.G

Ravikumar.G (Expert)
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24 September 2008 Pre operative expense is a capital expenditure. You can allocate proportionately into fixed assets.

Prasanna Bhat

Prasanna Bhat (Querist)
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24 September 2008 Cant the pre-operative expenses of last year be treated as loss and close the entry. If we allocate proportionately to fixed assets what is the entry we need to pass in the books.

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Prasanna Bhat

Prasanna Bhat (Querist)
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24 September 2008 Cant the pre-operative expenses of last year be treated as loss and close the entry. If we allocate proportionately to fixed assets what is the entry we need to pass in the books.

S.Srinivasaraghavan

S.Srinivasaraghavan (Expert)
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26 September 2008 If a business is closed (with no prospects of reopening),prior to its commencement, still the head of expenditure can be only pre-operative and charged to profit and loss account.