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ROC fee for increasing the authorised capital

Birendra (16 Points)

10 May 2007

whether the filling fee for increasing the authorized capital will be treated as the capital expenditure as per companies Act, or not,if it is then what is the exact accounting treatment?

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3 Replies

Ramkrishna (Accountant) (325 Points)
Replied 10 May 2007

it comes under head deffered expenses since its impact is for undefinite period.it is treaed like write off of prliminiary exp for five consecutive year under the above said head? my opinion

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Jas (28 Points)
Replied 10 May 2007

hi dear

my opinion differs frm the one gven by mr. ramkrishna as expenditure incurred on increasing the authorised share capital cant be amortised becz A.S -26 does not permit its capitalisation snce u r askng the accountng treatment as per the companies Act, which requires the applicable A.S to be complied with. In my opinion the whole amount should be written off in the same year in which it is incurred.

yes for the purpose of income tax Act the treatment suggested by mr. ramkrishna is correct. becz tere r case lws under the Incme tax act whch prscribes such treatment.