Dear All,
I have a client who has various franchisees. He has entered into an agreement wherein the cost incurred by the Franchisee for the purpose of Setup of the Franchise will be re-imbursed by him in 4 year. Thus the payment made by him for assets and other setup cost are shown as Re-imbursement and the same is classified under Business promotion.
At the end of the 4th year, all the assets will be trfd to the Franchiser and he will show such assets at the last re-imbursement paid by him.
Is the treatment proper?
CAclubindia
