11-14-2007, 09:45 PM
Dear Kamran,
As considered by some people, deferring pre-operating expenses untill the start of normal business activities are not exactly deffering cost. I mean in practice we can see two situations. Some companies are making profit and loss account before the start of normal business activities. Other are following the same practice that is they are deferring pre-operating expenses untill the start of normal operations. And I think they are able to do it as there are no clear cut instructions regarding deferring of pre-operating expenses even in revised fourth and fifth schedule. However, in this case I think after the start of business operations these companies have to expense these deferred expenses (deferred after the revision) instead of following their amortization policy.
Your opinion will help in further clarification.
Regards
As considered by some people, deferring pre-operating expenses untill the start of normal business activities are not exactly deffering cost. I mean in practice we can see two situations. Some companies are making profit and loss account before the start of normal business activities. Other are following the same practice that is they are deferring pre-operating expenses untill the start of normal operations. And I think they are able to do it as there are no clear cut instructions regarding deferring of pre-operating expenses even in revised fourth and fifth schedule. However, in this case I think after the start of business operations these companies have to expense these deferred expenses (deferred after the revision) instead of following their amortization policy.
Your opinion will help in further clarification.
Regards
