I would like to get confirmation on the best treatment for pre-incorporation costs under IFRS and in under to get them tax deductible too.
A little background:
The Company is not yet incorporated and some travel costs, consultant, legal and feasibility study costs.
Under IAS 38 paragraph 69, the below costs should be expensed:
(a) Travel-related costs; costs related to employee salaries; and costs related to feasibility studies, accounting, tax, and government affairs
(b) Training of local employees related to product, maintenance, computer systems, finance, and operations
(c) Recruiting and organizing
I suppose that the other side of the expense should be booked in the balance sheet as a payable to the founder and other people working on this project.
In under to get this recorded and tax deductible, should we keep all invoices and expenses paid with relevant documentation showing their purpose?