1> What is the difference between preliminary expenses and pre-operative expenses?
2> Accounting treatment for preoperative expenses?
3> Tax treatment for pre-operative expenses?
before the commencement of commercial production all expense are termed as preoperative expenses which are pending allocation to fixed assets and once commercial production starts (supported by a certificate received from technical engineer-indicating date of commercial production ) and they will be capitalised in the ratio of Gross block of Assets
Preliminay expenses are something like a defered revenue expenditure where a whole expenditure incurred is not written off in that year but written off over a period of time say advertisement incurred on launch of a new product. since benefit accrues over a period of time
Tax treatment for preoperative expense since commercial production has not started all expense can be claimed as business expenditure