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accounts doubt

rahul KKK (ARTICLED ASSIS) (93 Points)

27 February 2009

whats the logic behind profit prior to incorpn....

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Sneha Mago (Articleship PCC MCOM) (38 Points)
Replied 27 February 2009

PROFIT PRIOR TO INCORPORATION MEANS PROFIT THE FIRM OR COMPANY HAS EARNED DURING THE INCORPORATION PERIOD I.E THE COMPANY IS IN WAY OF STATRING WHERE BUSINESS ACTIVITY HAS NOT STARTED

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Atul Kumar (CA) (504 Points)
Replied 27 February 2009

Sneha has given convincing reply.

(Guest)

ru asking or checking

nikhita (STUDENT) (102 Points)
Replied 02 March 2009

Originally posted by :rahul
"	whats the logic behind profit prior to incorpn....	"

it is not possible b coz prior incorp. company can not sell the product.

CA CS CIMA Prakash Somani (Landmark Group) (23502 Points)
Replied 02 March 2009

As the nam,e itself says about it "Profit prior to Incorporation".

First thing we elaborate is "It does not include losses prior to incorp. Profit prior to Incorp is a capital profit as it is not earned from normal business activities. The treatment is that it should be deducted from capital cost of company.