Preliminary Expenses Amortised
<p><b >Preliminary expenses</b> are the <b >expenses</b> that the company incurs prior to the incorporation of the company. Examples would be <b >expense</b> incurred by founders to incorporate the company, develop the logo, register company name, etc. You could call these pre existence <b >expenses</b>.
 
From an ATO perspective, and a traditional Australian Special Purpose Reporting perspective, preliminary expenses associated with establishing a business are amortised over five years. Unlike the amortisation of borrowing expenses where the amortisation period starts on the actual day the borrowing cost was incurred, preliminary expenses are amortised by one fifth in the financial year the cost was incurred and in the subsequent four financial years.
 
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