Question

    A company incurred ₹1 lakh as preliminary expenses.

    How should it treat the amount under current Ind AS?
    A Show under assets and amortize Correct Answer Incorrect Answer
    B Write off immediately Correct Answer Incorrect Answer
    C Amortize over 5 years Correct Answer Incorrect Answer
    D Transfer to capital reserve Correct Answer Incorrect Answer

    Solution

    Ind AS does not permit capitalization of preliminary expenses. It should be written off in the year incurred.

    Practice Next