TREATMENT OF PRELIMINARY EXPENSES IN ACCOUNTING STANDARD
This query is : Resolved
30 July 2008
HOW WE DEAL WITH PRELIMINARY EXPENSES ACCORDING TO ACCOUNTING STANDARDS
WHETHER ACCOUNTING STANDARD 26 IS APPLICABLE FOR IT ?
PLEASE ALSO ELABORATE THE ENTRIES TO BE MADE IN THE BOOKS RELATED TO IT
WHETHER ACCOUNTING STANDARD 26 IS APPLICABLE FOR IT ?
PLEASE ALSO ELABORATE THE ENTRIES TO BE MADE IN THE BOOKS RELATED TO IT
30 July 2008
Preliminary Expenses are governed by Guidance Note on Treatment of Expenditure during construction period. and not by AS 26.
These Expenses include company formation expenses in connection with issue of shares and debentures and getting the preliminary public documents such as memorandum, articles prospectus, etc.
These should be written off in a period not exceeding 5 years.
These Expenses include company formation expenses in connection with issue of shares and debentures and getting the preliminary public documents such as memorandum, articles prospectus, etc.
These should be written off in a period not exceeding 5 years.
30 July 2008
Sir,
In my knowledge the treatment of 5 years is in accordance of Income Tax Act 1961 and
what we do about preliminary expenses in accounting standards?
In my knowledge the treatment of 5 years is in accordance of Income Tax Act 1961 and
what we do about preliminary expenses in accounting standards?
31 July 2008
I opine that preliminary expenses are covered by Guidance Note on Treatment of Expenditure during Construction Period but these expenses should be capitalized by apportioning them on capital assets.
But in Income Tax Act Sec 35D deals with preliminary expenses and treatment of the same.
But in Income Tax Act Sec 35D deals with preliminary expenses and treatment of the same.
31 July 2008
Please see para 56 of AS 26. These are items expensed at the time they are incurred.
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