treatment of pre operative expenses

1949 views 2 replies

Trisha Bedi

78 Points Joined December 2007

/5/2008 11:45:25 AM Please tell me the adjustment of pre operative expenses in books of a corporate assessee. The assessee is having pre operative epenses such as salary, electricity, other Expenses amounting to Rs. 53.40 Lacs which are incurred prior to the operation of business.the Co. has intended to write off this in 10 yr i.e 1/10th evry yr.So, please suggest me wht is the appropriate treament of pre operative expenses in books of accounts as per IT or Company Law??? can we capitalised the same in ratio of building & Machinery!! Pls revert ASAP. Regards; Risha

Replies (2)

manish kumar

C.A. Final As An Audit Assitant

22 Points Joined June 2008

Hi, Preoperative expenses should be allocated between the assets, other then Land, in in ratio of the cost of assets.

Regards

Manish

CA CS VINAYAK PATIL

CHARTERED ACCOUNTANT

921 Points Joined February 2009

Originally posted by :Risha
"	/5/2008 11:45:25 AM Please tell me the adjustment of pre operative expenses in books of a corporate assessee. The assessee is having pre operative epenses such as salary, electricity, other Expenses amounting to Rs. 53.40 Lacs which are incurred prior to the operation of business.the Co. has intended to write off this in 10 yr i.e 1/10th evry yr.So, please suggest me wht is the appropriate treament of pre operative expenses in books of accounts as per IT or Company Law??? can we capitalised the same in ratio of building & Machinery!! Pls revert ASAP. Regards; Risha	"