Question

Is floatation cost capital expense or revenue expense case law india

Answer 1

Answer:

Expenses incurred in raising capital are expenses of exactly the same character whether the capital is raised at the floatation of the company or thereafter: Texas Land and Mortgage Company v. William Holtham [1894] 3 Tax Cas. 255, 260."

Answer 2

Answer:

The difference between the cost of existing equity and the cost of new equity is the flotation cost. The flotation cost is expressed as a percentage of the issue price and is incorporated into the price of new shares as a reduction.