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PREOPERATIVE EXPNESES

22 October 2007

Hi Friends.

Please advise me with respect to this question. A Company has been incorporated on 10.04.2006. It has not commenced its operations till 31.03.2007. How should the transactions(i.e. expneses in particular) that occurred between 10.04.2006 and 31.03.2007 be treated?

Please advise asap.

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2 Replies

divyabal (16 Points)
Replied 23 October 2007

These above expenses are in the nature of Pre-operative expenses. Those expenses whic are incurred on assets being capitalised it shall be loaded on to the same and capitalised. Any other expense will be charged off through P &L appropriation a/c

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Prakash Popat (3134 Points)
Replied 23 October 2007

It's direct bearing to capital accounts,srtictly speaking depend upon expenditure nature it could be capitalised,Rest is Miscellenous Expenditure,to be absorbs in the year ahead & deffered.