My client (a private limited company, manufacturing unit) started a business and all the assets are currently at WORK IN PROGRESS stage, In FY 2021-22 ,all the expenses were termed as pre operative expenses and some are capitalised.
But now in FY 2022-23 , Assets are still at WIP stage, but they purchased (finished goods)some items and directly sold them.
Now, what should be the accountinf treatment?
should I include purchase and sale in P&L account, and other expenses as pre operative expenses?
or should I include everything in p&l and write off the earlier pre operative expenses??
First option is preferable.
CAclubindia
