Preliminary exp.

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KISHOR GOHIL (Querist)
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17 September 2012 Sir,
Recently Ammendment in Schdule VI. Schedule VI silent about presentation of Preliminary Expense in balance sheet. But We attend seminar in which told me that Preliminary Exp. Totally written of in Profit & loss account. And Claim Preliminary Expenses in Computation by add- back of Prelimiary Exp. So I am confused about presentation of Preliminary Exp. So Please guide in this matter. And how we claim this expenses in p & L?

swasti

swasti (Expert)
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17 September 2012 Kishore.... it could be understood like this that if a company has Rs 10000/- as preliminary expenses standing in the B/s as on 01/04/2011. Earlier practice was that only 1/5th of the Preliminary Expenses was w/off thru P & L A/c. But now as per Revised Schedule VI, for the year 2011-12, the total Preliminary Expenses of Rs 10000/- would be w/off thru P & L A/c. However in computation you would get allowance of only 1/5th of expenses every year. So in the computation, you have to disallow Rs 10000/- & allow Rs 2000/-.