{"id":96618,"date":"2020-12-28T17:06:00","date_gmt":"2020-12-28T11:36:00","guid":{"rendered":"https:\/\/www.vskills.in\/certification\/tutorial\/?page_id=96618"},"modified":"2024-04-12T14:25:28","modified_gmt":"2024-04-12T08:55:28","slug":"items-to-be-recognised-as-an-expense","status":"publish","type":"page","link":"https:\/\/www.vskills.in\/certification\/tutorial\/items-to-be-recognised-as-an-expense\/","title":{"rendered":"Items to be Recognised as an Expense"},"content":{"rendered":"\n<p>Expenditure on an intangible item should be recognised as an expense when it is incurred unless:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>It forms part of the cost of an intangible asset that meets the recognition criteria or<\/li><li>The item is acquired in an amalgamation in the nature of purchase and cannot be recognised as an intangible asset. It forms part of the amount attributed to goodwill (capital reserve) at the date of acquisition.<\/li><\/ul>\n\n\n\n<p>AS 26 states that the following types of expenditure which should always be recognised as an expense when it is incurred:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Research;<\/li><li>Start-up activities (start-up costs), unless the expenditure qualifies to be included in the cost of a tangible fixed asset. Start-up costs include:<\/li><li>Preliminary expenses incurred in establishment of a legal entity; such as legal and secretarial costs;<\/li><li>Expenditure to open a new facility or business (ie pre-opening costs); and<\/li><li>Expenditure prior to starting new operations or launching new products or processes (ie pre-operating costs);<\/li><li>Training activities;<\/li><li>Advertising and promotional activities; and<\/li><li>Relocating or re-organising part or all of an enterprise.<\/li><\/ul>\n\n\n\n<p>It does not apply to payments for the delivery of goods or services made in advance of the delivery of goods or the rendering of services. Such prepayments are recognised as assets.<\/p>\n\n\n\n<p>Expenses recognized as expenses cannot be reclassified as cost of Intangible Asset in later years.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Expenditure on an intangible item should be recognised as an expense when it is incurred unless: It forms part of the cost of an intangible asset that meets the recognition criteria or The item is acquired in an amalgamation in the nature of purchase and cannot be recognised as an intangible asset. It forms part&#8230;<\/p>\n","protected":false},"author":1,"featured_media":0,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-96618","page","type-page","status-publish","hentry"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v24.5 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Items to be Recognised as an Expense - Tutorial<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.vskills.in\/certification\/tutorial\/items-to-be-recognised-as-an-expense\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Items to be Recognised as an Expense - Tutorial\" \/>\n<meta property=\"og:description\" content=\"Expenditure on an intangible item should be recognised as an expense when it is incurred unless: It forms part of the cost of an intangible asset that meets the recognition criteria or The item is acquired in an amalgamation in the nature of purchase and cannot be recognised as an intangible asset. 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