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Fictitious Assets

Sujal Jain (30 Points)

07 November 2021

What is Fictitious Assets ?

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prasad Nilugal ( GST Practitioner & Accounts ) (14801 Points)
Replied 07 November 2021

Fictitious assets means , asset which are not represented by anything concrete ,there is no tangible property . For example preliminary Expenses , Commission or brokerage on under writing shares etc .

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CA. Sourav Sarkar (Chartered Accountant ) (24583 Points)
Replied 07 November 2021

Fully agree with above comment

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Sujal Jain (30 Points)
Replied 07 November 2021

As preliminary expenses , commission, brokerage etc. are expenses so why we are taking it into asset

prasad Nilugal ( GST Practitioner & Accounts ) (14801 Points)
Replied 07 November 2021

We are showing under asset because ,we have to written off such type of Expense in the coming years and balance carried forward to next year for write off i.e preliminary expense incurred at time of incorporation of company is to be written off as per section 35(d) of the Income tax act 1961 within stipulated time period.

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prasad Nilugal ( GST Practitioner & Accounts ) (14801 Points)
Replied 07 November 2021

I just want correct my second reply above preliminary expense can be written off within five year , however as per section 35 of the income Tax act , total preliminary expense can not be more than 5 % of the capital employed , which can be amortized in five equal installment .

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CA. Sourav Sarkar (Chartered Accountant ) (24583 Points)
Replied 12 November 2021

Prasad is correct

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Yasaswi Gomes new (Finance ) (4514 Points)
Replied 20 December 2022

Hi Saurav what happened and not cominf anymore? It was nice in the old days. Fictious assets? Who cares about interviews anymore when you dont get a job as a CEO?