prep. of P & L account during development phase

[tayyert]

hello!!!!
i have question for your to ask. do we have to prepare the profit and loss account if business has not yes started its operations and no fixed asset is recognized except land?
however, different expense are occurring like pre-operating expenses, research and development and admin expenses including other expenses directly attributable to qualifying assets. do we create deferred costs head in assets side to write off these expenses when operation is started?? or do we create profit and loss account and charge the expenses to same year when these expenses are occurred.

please give the answer with references of related IFRS and companies ordinance.

 

[kirby]

To answer your first question - you need only to create financial statements (such as P&L) when needed. Main users are management or bank (who may want them if they loaned you money). So if you are aware of a request of eiither of these two for financial statements then - yes- do prepare them. Otherwise - no need to do so.

I cannot determine your other questions. Can you re-phrase them?

 

[bookkeeperchick]

I think once business has started - it will definitely incur all start-up costs/organizational expenses & the like so you can put them all together which can be recognized as asset & could be amortised over a minimum of 5 years... So you don't need to write them off - rather do monthly amortisation... Then at the end of the month - you can prepare your P&L & BS (not when operation started). Hope this helps (somehow).