Pre-incorporation expenses liability for another company?

Pre-incorporation expenses liability for...

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Hi,

Just doing my year end hope someone can advise.

I'm holding some pre-incorporation & pre-trading expenses for a separate Ltd company on my P&L. A variety of transactions in diff accounts.

Whats the appropriate accounting treatment please.

Thanks in advance!

Stu.

Replies (2)

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By johngroganjga
08th Jan 2015 05:46

If the other company is going to reimburse you for the expenditure you have incurred on its behalf take the expenditure out of the P&L and put it in debtors. Otherwise leave it where it is.

That's the accounting treatment. If the expenditure remains in the P&L you will also need to decide whether to add any of it back in your corporation tax computations.

Meaning no offence, if you are not able to think these simple things through yourself you should not really be doing your own accounts without assistance. Why are you not using an accountant?

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By johngroganjga
08th Jan 2015 08:58

Just noticed your question again and see that in your sub-heading (not visible when the question is opened) you use the term "joint venture" but in your question you refer to the expenditure having been incurred on behalf of "a separate Ltd company".

If your company has incurred expenditure on behalf of a joint venture of which it is itself a member that would be a different kettle of fish and the answer to your question might be different.  Perhaps you need to spell out exactly what is happening a little less ambiguously.

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