25 October 2008
A company is registered two years ago. It has not started any activity till now. But it some expenses like audit fee, legal fee, bank charges etc. I want to know how to treat these expenses in the final accounts. Two months before, I have put the same query and the answer was that the exp should be treated as pre-operative expenses. But one of my friend CA has told me that these are not pre-operative expenses. Instead these are revenue expenses and a return of loss should have been filed. Please guide me what is the exact procedure to treat the same in the books. Plz ans. Thanx
25 October 2008
THese are preoperative expenses only. Whether they are to be capitalised or to be written off depends upon the activity of the company during that period.
28 October 2008
Before Starting of Commecial Activity what ever expenditure incurred to set up an enterprise/factory/unit etc....will be treated as Preoperative expenditure.
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