Examples for fictitious assets?????????????????????

like preliminary expenses not written off, discount on issue of debentures not written off.

thq Mr. Ashish

We shown some asset under the head "MISC. EXPENDITURE (to the extent not written off)  in the balance sheet on asset side however that does not have any value ....called fictitious Assets. Example are same as pointed out by Mr Ashish.

Regards

Arun

can you explain what does 'written off' exactly mean??

i have always heard written off but no one explained what it means.

written off means writing off the value of assets in P&L A/c. i.e. Debiting the P&L and crediting the assets.

Fictitious assets are those assets which are not tangible in nature & has no value. They are not taken over in the process of M & A. They are loss assets. They are shown on the assets side as they show debit balance. They are like preliminary expenses, P& L a/c (loss) & discount on issue of shares.

Thank u Mr. Phalgun. Well again a doubt is raised in my mind. according to ur explanation "Fictitious assets are those assets which are not tangible in nature & has no value." is............. intangible assets and fictitious assets are same?

Intangible assets & Fictious assets are not one & the same. Intangible assets have value eg like Good will, Copy Rights, patents ....etc. Fictitious assets have no value. Intangible assets worth are taken over in the event of M & A. In the event of internal reconstruction same is written off. AS 26 deals with intangible assets.

what is M&A?

@ Hemant -  It stands for Mergers and Acquisition

Thank you Mr. Ashish Gupta and Palgun

what is M&A

Fictitious assets are those assets which are not tangible in nature & has no value.

The examples are Preliminary expenses, Profit and Loss( debit/loss), discount on issue of debetures not written off, share issue expenses.

These are shown on the asset side of Balance sheet under Miscellaneous expenditure and now in revised schedule it will be shown on other current assets or written off .

 Further these assets are not taken over during any Merger or Amalgamation process.

Goodwill — although a fictitious asset — is typically an intangible asset for recording purposes. Though the item is a fictitious asset because it is not real, GAAP requires the item to be recorded as an intangible asset. The purpose for this is because a company will not need to immediately expense any amount of goodwill recorded through a business purchase. Goodwill does retain some value through multiple accounting periods for the business.

With Best Regards,

Ajeet Singh

ajeetsinghrayat @ gmail.com