17 September 2012
our client is a pvt. limited co. incorporated in june 2011. The co. could not start its operation till 31.3.2012, however it incurred several exp. e.g rent, electricity, salary etc. Now the question is how to pass the entries. Shuld it be chgd to p&l completely as per as-26? How to present it under revised sch vi. And last how it would be treated as per Income tax act. Kindly clarify.
17 September 2012
Yes.. As per AS 26 it doesnot create any tangible of intangible asset and accordingly be recognised as expense in the year in which it is incurred. In Income tax, Section 35D will be applicable. 1/5th of the expenditure will be allowed as expenense in the current year and balance in equal proportion in the subsequent years subject to the Compliance of provions of section 35D
30 October 2012
In revised Schedule VI , The 1/5 the of the amount which will be amortised in the next year should be shown under "Shortterm loans and advance" and the remaining should be shown under "Long Term Loans And advances"
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