Hi..
ABC Ltd company is developer, and incurred marketing expenses and overheads expenses during the initial year and didn't recognize any revenue in the first year.
my query is, as per AS-2 we can't capitalized these expenses to inventory and as per matching concept we have to deferred this expenses for next year.
is it mean we have to show those expenses into P&L?
marketing expenses and overhead expenses incurred in the initial year should be expense in their profit and loss account in this year. As thease expenses are incurred for the purpose of enhance the revenue in subsequent year and is in nature of promotional expenses.
These are not part of inventory as these are not incurred in connection with inventory.
CAclubindia
