Pre-operative Expenes

[CASUNIL BHANSALI]

I have create a company and after incorporation, i incur some pre operative expense and other income like Interest on FDR  so i prepare P&L Account to claim these pre-op expense. Now the business of the company has not been started. in next years company has not any income so we are showing expenses as pre-operative expenses. is it ok to show pre-op exp. after preparing P&L account. please tell me proper treatment for the same.

AI Summary

Founder Questions Pre-Operative Expense Treatment Post-Incorporation; Respondent Cites Accounting Standard 26 on Intangible Assets A company founder inquired about the treatment of pre-operative expenses and other income, such as interest on fixed deposits, after incorporating a company but before starting business operations. The founder prepared a Profit & Loss Account to claim these expenses. A respondent advised that, following Accounting Standard 26 on Intangible Assets, pre-operative and deferred revenue expenses should be debited directly to the Profit & Loss account, as the concept of pre-operative expenses no longer exists. This standard has been applicable to all entities since April 1, 2004.