Aarthi.P
asked
Is it mandatory to write off preliminary expenses in the first year itself as per AS-26 .? If it is amortised over 5 years., is it correct to show the unamortised amount as Current assets?
0
0
Answer Now
Comment
Report
Aarthi.P commented
over 2 years ago
Thank you all for replying
3
Answers
legal steroids
answered
I definitely enjoying every little bit of it. It is a great website and nice share. I want to thank you. Good job! You guys do a great blog, and have some great contents. Keep up the good work. Capital Gains Tax Advice
Important Note – Preparing for CA Final?
CAKART provides Indias top faculty each subject video classes and lectures – online & in Pen Drive/ DVD – at very cost effective rates. Get video classes from CAKART.in. Quality is much better than local tuition, so results are much better.
Watch Sample Video Now by clicking on the link(s) below –
For any questions Request A Call Back
Urmil
answered
The benefit of the preliminary expenses is long-term so it is treated as intangible asset and shown in Balance sheet under Missilinous assets. These expenses will be written off in 5 equal year instalment in profit and loss A/c. you can also transfer whole amount in single year but for income tax purpose 1/5 of the amount will consider.
Accounting Entries:
1. Preliminary Expense - Dr (Current Asset)
To Cash\Bank
1.Preliminary Expenses Written Off - Dr (Indirect Expenses)
To Preliminary Expenses
2.Profit & Loss A\c. - Dr
To Preliminary Expenses
CAKART
answered
**
Preliminary expenses treatment.
-------------------------------
**
The benefit of the preliminary expenses is long-term so it is treated as intangible asset and shown in Balance sheet under Missilinous assets. These expenses will be written off in 5 equal year instalment in profit and loss A/c. you can also transfer whole amount in single year but for income tax purpose 1/5 of the amount will consider.
Accounting Entries:
1. Preliminary Expense - Dr (Current Asset)
To Cash\Bank
2. Preliminary Expenses Written Off - Dr (Indirect Expenses)
To Preliminary Expenses
3. Profit & Loss A\c. - Dr
To Preliminary Expenses
SONIYA commented
over 2 years ago
2. profit & Loss A/c-------Dr To preliminary Expenses written off A/c not 2.Profit & Loss A\c. - Dr To Preliminary Expenses
