• ojo kayode what is preliminary expenses? how can this be treated in accounting
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    what is preliminary expenses? how can this be treated in accounting,
    20 October 2010Comment
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    • andy chuks Preliminary Expenses are expenses incurred in formation and setting up a business/company. They include expenses for preparation of feasibility report, project
      report or for conducting market survey or any other survey or engineering services relating to the business and Legal charges for drafting any agreement for setting up or for conduct of any business, consultancy services, office equipments etc. Thus, they are expenses incurred before commencement of business.

      Preliminary Expenses are treated in accounting by amortising it over some years (usually 5 years). In some cases they are written off in Profit and Loss Account in a deferred way.

      Like It1 Unlike It0 20 October 2010