Preliminary expenses are the expenses that are spent by the promoters before the incorporation of company.
Feb 10 2014 12:51 AM
Expenses paid for CA for incorporation of company
Expenses paid for name approval of the company
Expenses for printing of statutory documents like MOA, AOA
Stamp duties paid.. so on and so forth..
Since the benefit of the preliminary expenses is long-term, it is treated as intangible asset and shown in Balance sheet under Miscellaneous assets. These expenses will be written off in 5 equal year installment in profit and loss A/c