Treatment of Preliminary Exp. in books
This query is : Resolved
CA Sahil Singla..
(Querist)
15 April 2011
Sir
As per AS 26, Intangible Assets, Preliminary Expenses incurred by entity should be written off as soon as it is incurred. So,does it mean that we have to prepare profit & loss A/c for the periods before the entity comes into Existence ?
How can be this done ? Please Clarify bcoz we usually don't prepare such P/l A/c & write off preliminary Exp. in 5 years from the year the entity come into existence.
As per AS 26, Intangible Assets, Preliminary Expenses incurred by entity should be written off as soon as it is incurred. So,does it mean that we have to prepare profit & loss A/c for the periods before the entity comes into Existence ?
How can be this done ? Please Clarify bcoz we usually don't prepare such P/l A/c & write off preliminary Exp. in 5 years from the year the entity come into existence.
Kumar Babu.G
(Expert)
15 April 2011
It is a debatle point.many companies won't prepare P&L a/c during constrcution stage.But P&L a/c has to be prepared as far as my knowledge and experience is concerned in the cases you have mentioned.
Message likes :
1 times
CA Sahil Singla..
(Querist)
15 April 2011
According to me, the reason behind this could be Income Tax Act.
Entities write off preliminary Exp. in 5 years as per Income tax act & not as per AS 26, which is a wrong practice.
But on the other side question arises that how can a P/l A/c can be prepared without entity coming into existance ?
Entities write off preliminary Exp. in 5 years as per Income tax act & not as per AS 26, which is a wrong practice.
But on the other side question arises that how can a P/l A/c can be prepared without entity coming into existance ?
Dhirajlal Rambhia
(Expert)
08 July 2023
"Sorry, I am not a featured member."
For featured members contact....
https://www.caclubindia.com/catalogue/featured.asp
For featured members contact....
https://www.caclubindia.com/catalogue/featured.asp
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Clarification on GST, TDS, and Accounting Provisions for Import/Export
- Ito add credit side of bank
- GSTR9 Annual Return
- Employee secondment
- Clarification on GST, TDS, and Accounting Provisions for Import/Export Commission Agents,profes. ser
- Positive Balance in RCM Liability/ITC Statement – Commercial Rent RCM – Guidance Required
- Rent agreement of House of deceased person
- Applicability of tax on invoice
- Import of Capital Machine
- Capital gain on commercial property and investment in residential property
- Regime change
- Tally: Imported bank entries do not show up in manual reconciliation
- Confused About My Career After 12th — Cyber Security, AI or Finance? Need Guidance
- FAST-DS 2026 Under Tax Law - No recourse or support for person declaring via this scheme?
- Guidance Needed: Linking Multiple Form 26QB Payments and Responding to ITD Defaulter Notice
- How to pay remaining amount of TDS after due date?
- Resigning a auditor from the company for misconduct
- RCM @ 5% on Hamali charges, Transport Charges, Unloading charges we take ITC or not
- Need Professional Opinion - AY 2012-13 Old Demand & AY 2026-27 Refund Adjustment
- CALCULATION OF DEFFERED TAX - OP BL IS DTL & CURRET IT DTA
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
