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Urgent: new balance sheet
where to show Preliminary Expenditure in new Balance Sheet..
Replies (8)
It wil be shown in reserve and surplus as negative item....
Preliminary expenses are not shown in the balance sheet.
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Whole amount will be recognised as an expense when it is incurred, by way of a charge to the profit and loss account. [Refer to Para 56 of AS 26]
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Further, if the same has been treated incorrectly by the company in the year of incurrence, it should be rectified in the current year and disclosed appropriately as a prior period item in accordance with AS 5.
Whole amount charged to p/l a/c. No need to disclose in b/s.
I got to know this...
Preliminary expenditure show in balance sheet asset side
show in reserve and surplus as negative item
you must write it off to p&l when it is incurred considering it as an expense. it should not be disclosed in b/s.
preliminary exp are shown in b/s under current or non current asset depending on the period of amortisation
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