What are Fictitious Asset meaning in Accounting
Fictitious Assets are not assets at all but shown however, they are shown as assets in the financial statements only for the time being.
Fictitious Assets are expenses incurred in one accounting period and written off in more than one accounting period.
Fictitious assets are expenses & losses which for some reason are not written off during the accounting period of their incidence
In other words, fictitious means fake or not real,. Expenses incurred in starting a business, goodwill, patents, trademarks, copy rights comes under expenses which cannot be placed any headings.
Point to Understand
- Fictitious assets have no physical existence.
- No realisable value.
- They are amortised in one or more profitable financial years.
Example of Fictitious Assets
- Promotional marketing expenses.
- Underwriting commission.
- Preliminary expenses.
- Discount allowed on shares.
- Loss incurred (issue of debentures)