We receive lost of questions regarding disclosure of Preliminary Expenses in Balance Sheet as per Revised Schedule VI. Every one have different opinion on how to disclose the same in revised schedule VI.  In our view Miscellaneous / Preliminary Expenditure should be disclosed as follows in revised schedule VI :-

In Profit and Loss Account :-  Preliminary Expenditure written off during the year should be shown in notes  Under  ‘Other Expenses’.

In Revised Balance Sheet :-  In Revised Balance Sheet it should be shown as ‘Other Assets’ and its amount should be shown in non current Assets column.

A Format of such Presentation is as follows :-

In Our View AS 26 do not cover the following :-

•Expenditure on exploration, mining etc..- Guidance note in force
•Contracts between insurers and policy holders- AS not yet introduced
•Accounting for discount/premium on securities- AS 30
•Incidental costs for arranging borrowings – AS 30
•Share issue expenses  – No where specifically

Alternative option for Presentation of the Preliminary Expenses in Balance Sheet :–  We may take the same as covered by Accounting Standard 26 of ICAI on Intangible Assets and write off the expense fully in the year of occurrence.

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