preoperative expenses

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subha (Querist)
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11 November 2007 can u please tell me which section of Companies Act deals with preoperative expenses, its treatment etc...Such as whether to be capitalised etc....

Ramasubbu K

Ramasubbu K (Expert)
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12 November 2007 Preoperative expenses i.e preliminary expenses to be disclosed as per Schedule VI of the Companies Act and in the Statutory Report u/s 165 and Statement in lieu of prospectus. But the treatment has not been given in any of the Section of the Companies Act.

Section 35 D of the Income tax Act deals with the preliminary expenses which clearly says about the nature of expenses to to treated as preliminary expenses and the amortisation etc.