Treatment of expenditure incurred for formationof 100% subs

[NITIN DESAI]

We haveestablised new 100% subsidiary company inUAE.for thispurposewe haveincurredexpensesin India and use Pl guide for accountingtreatment

AI Summary

Debate on Classifying UAE Subsidiary Establishment Costs: Capital or Revenue? Insights from Accounting Standard 26. A discussion on the accounting treatment of expenses incurred for establishing a 100% subsidiary in the UAE, initiated by a user, received four replies. The primary concern is whether these expenses, including legalisation charges, licence fees, professional fees, visa fees, and share capital transfer, should be classified as capital or revenue expenses. One respondent advises that, according to Accounting Standard 26 on intangible assets, preliminary expenses for establishing a legal entity should be treated as revenue expenses. The discussion seeks further clarity and references to relevant case law or judgments.