Question

Where are Store opening appear on Financial Statements? Examine how store opening and organization costs were handled and where these costs appear in the financial statement.

Answer 1

Store opening is an long term tangible asset and will appear in long term asset side of financial statements.

Store opening costs are capitalised and would be provided for depreciation annualy on the basis of depreciation method being selected, and the organizational costs are period costs in nature and would be expensed off in the period being incurred.

Store opening costs would appear in balance sheet net of accumulated depreciation, whereas organizational costs would appear in tje income statement.