Question ID :
44444
151793
A company initiated its IPO application procedure during FY 2021-2022. It received approval for DRHP in November 2021 with a validity of 1 year i.e. by November 2022 to file the RHP and complete the listing procedure. Thus, the expenses incurred up to 31/03/2022 were treated as prepaid expenses and showed under current assets due to the pendency of completion of the listing procedure. Thereafter, the company incurred further expenses during FY 2022-2023 towards the IPO application procedure. These expenses were also treated as prepaid expenses and were shown under current assets. However, the company could not file the RHP and complete the listing procedure within the stipulated time period of 1 year i.e. by November 2022. Need guidance as to how the expenses which were treated as prepaid expenses should be accounted for in the financial statements as of 31/03/2023. Will they be considered as regular revenue expenses or treated as exceptional items or should be considered as Misc. Asset and be amortised as deferred revenue expense over a period.
Posted by
Harpreet Singh Ghai
on
Mar 16, 2023
Filed Under
AUDIT
As the IPO Process is not completed entire amount to be written off during the year.
Posted by
VINAY BHARGAV KUMAR G on
Mar 18, 2023