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Concept of Preliminary Expenses?

Ankit Agarwal (Student) (77 Points)

02 July 2011

I would like to know what all expenses can be transferred to Preliminary Expenses before a company starts it's operations? What are the rules and guidelines of Preliminary Expenses, please let me know. Thanks

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CS,CA F,Numrologi TusharSampat (CS CA F Numerologist Astrologer Graphologist Face reader Vastu Expert) (85930 Points)
Replied 02 July 2011

Preliminary expenses are those which are incurred by promoters before getting certificate of incorporation by the company and all such expenses are accounted under dis head only.

Wat rules you are talking about and in wat context u want to kno ?

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Deepak Gupta (CA Student) (15922 Points)
Replied 02 July 2011

Guidance Note on Audit of Miscellaneous Expenditure [2003]

Attached File : 555789 756471 guidance note on audit of miscellaneous expenditure.pdf downloaded: 339 times

CA Himanshu Khurana (Chartered Accountant) (813 Points)
Replied 02 July 2011

Originally posted by : TusharSSampatM.Com CA,CS-FINAL
	Preliminary expenses are those which are incurred by promoters before getting certificate of incorporation by the company and all such expenses are accounted under dis head only. Wat rules you are talking about and in wat context u want to kno ?

Sandeep Garg (Consolidation and IndAS Application) (1056 Points)
Replied 17 July 2011

All the expenses incurred before company starts commercial operations are called as 'Pre-operative expenditure' or 'Expenditures During construction (EDC). Earlier there was a guidance note issued by ICAI for treatment of EDC in financial statements but the same has benn withdrawn in 2008. These expenses can be capitalised in accordance with AS 10, 26 and a circular issued by MCA in 1964. Till the time such expenses are capitalised are required to be presented in balance sheet as Capital work in progress or EDC.