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TREATMENT OF PRELIMINARY EXPENSES AS PER REVISED SCHEDULE VI
As per the Revised Schedule VI, Preliminary expenses which are to be amortized over the period of their benefit or to be amortized as per the provisions U/S 35 D of Income Tax Act, are to shown as Unamortized Expenses under the head of Other Non Current Assets.
Extracts of Guidance Notes to Revised Schedule VI :
As per the AS – 16 Borrowing Cost, ancillary borrowing cost and the discount or premium relating to borrowing could be amortized over the loan period. Further, Share issue expenses, discount on shares , etc. being special nature items are excluded from the scope of AS – 26 Intangible Assets. The Revised Schedule VI does not deal with the accounting treatment and the same continues to be governed by respective accounting standards and on going practices. The Revised Schedule VI is clear that additional line items can be added on the face or in the notes. Keeping this in View, Unamortized portion of such expenses can be shown as as Unamortized Expenses under the head of Other Non Current Assets.
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