What is a start up fee and what does a start up fee mean

Start-up expenses refer to the expenses incurred by the enterprise during the preparatory period, including staff salaries, office expenses, training expenses, travel expenses, printing expenses, registration fees, and foreign exchange gains and losses and interest that are not included in the cost of fixed assets and intangible assets. (1) The specific content recorded in the start-up fee.

1. The cost of the preparation of personnel expenses.

1) Wages and benefits: including salary and bonuses and other wage expenses, as well as various social insurances that should be paid.

2) Travel expenses: including transportation expenses and travel expenses in the city.

2. Enterprise registration fee: mainly including industrial and commercial registration fee, capital verification fee, tax registration fee, notary fee, etc.

3. Financing expenses: mainly refer to the handling fees paid by financing, as well as the exchange gains and losses and interest excluding fixed assets and intangible assets.

4. Personnel training fee:

1) The cost of sending employees out to participate in training.

2) The cost of hiring experts for technical guidance and training.

5. Depreciation, amortization, scrapping and damage of enterprise assets.

6. Other expenses.

1) Office expenses, printing expenses, ** expenses, and entertainment expenses incurred during the preparation period;

2) Stamp duty (there may also be vehicle and vessel use tax and real estate tax);

3) The expenses incurred in conducting the feasibility study confirmed by the investor to be borne by the enterprise;

4) Other expenses related to the preparation, such as consulting fees, celebration gifts and other expenses.

2) Expenditures that are not included in the scope of start-up expenses.

1. Expenses incurred in acquiring various assets. For example, the freight, installation fee, insurance premium and other related expenses incurred in the purchase and construction of fixed assets and intangible assets.

2. Stipulate the expenses that should be borne by the parties to the investment. For example, the investment parties have conducted investigations and negotiations for the establishment of the enterprise, and incurred travel expenses, consulting fees, entertainment expenses and other expenses.

3. Exchange gains and losses, interest expenses, etc. that should be included in the value of assets during the preparation period (amortization of interest, discount or premium and exchange differences arising from special borrowings and meeting the conditions for capitalization).

The cost of the early stage of enterprise establishment, such as capital verification fee, decoration fee in the early stage, etc.

[Legal Analysis]: Start-up fees, also known as formation costs, refer to the costs incurred for the establishment of a joint-stock company, including legal fees, promoter fees and fees for obtaining licenses. Companies debit these costs to an expense account called start-up fees and recognize them as expenses when they incur because it's difficult to determine when these expenses will benefit the company and how much they will benefit the company in the future.

Scope of expenditure: 1Cost of Preparatory Personnel Expenses:

1) Labor expenses of the preparatory personnel: including the salary and bonus of the preparatory personnel, as well as various social insurances that should be paid. Welfare expenses such as medical expenses incurred during the preparation period can be paid according to the actual situation if the preparation period is short, and if the preparation period is longer, the employee welfare expenses can be calculated at 14% of the total salary to be resolved.

2) Travel expenses: including transportation expenses in the city and travel expenses in other cities. (3) Board of Directors Fees and Joint Committee Fees2

Fees for enterprise registration and notarization: mainly including registration fees, capital verification fees, tax registration fees, notary fees, etc. 3.

Expenses for raising capital: mainly refer to the handling fees paid for financing, as well as exchange gains and losses and interest excluding fixed assets and intangible assets. 4.

Personnel training expenses: There are mainly the following two situations: (1) the introduction of equipment and technology needs to be digested and absorbed, and some employees are selected to go out for further study during the preparation period. (2) Labor fees and related expenses for hiring experts for technical guidance and training.

5.Amortization, retirement and damage to corporate assets6Other Expenses:

1) Office expenses, advertising expenses, and entertainment expenses incurred during the preparation period. (2) Stamp duty, (3) Expenses incurred in conducting feasibility studies confirmed by the investor to be borne by the enterprise, and (4) Other expenses related to the preparation, such as information investigation fees, litigation fees, document printing costs, communication costs, and celebration gifts.

Legal basis]: "Detailed Rules for the Implementation of the Provisional Regulations of the People's Republic of China on Enterprise Income Tax" Article 34 The start-up expenses incurred by an enterprise during the preparatory period shall be deducted in installments within a period of not less than 5 years from the month following the month of commencement of production and operation.

Organization expenses, also known as organization costs, refer to the costs incurred to set up a joint-stock company, including legal fees, promoter fees, and the cost of obtaining a license. Companies debit these costs to an expense account called start-up fees and recognize them as expenses when they incur because it's difficult to determine when these expenses will benefit the company and how much they will benefit the company in the future.

Start-up expenses refer to the expenses incurred by the enterprise during the preparation period, including the salaries of personnel during the preparation period, office expenses, training expenses, travel expenses, printing costs, registration fees, and exchange gains and losses and interest expenses that are not included in the acquisition and construction costs of fixed assets and intangible assets. The preparatory period refers to the period from the date when the enterprise is approved to start production and operation (including trial production and trial operation).

It refers to the expenses spent on the establishment of enterprises or projects for the establishment of enterprises, and the accounting scope of the start-up expenses during the preparation period of the enterprise mainly includes:

1. The cost of the preparation of personnel expenses. Such as: employees' wages, benefits, insurance, provident fund, travel expenses, etc.;

2. The cost of enterprise registration and work permit. Such as: industrial and commercial registration fees, capital verification fees, appraisal fees, tax registration fees, etc.;

3. The cost of financing. For example, the handling fees incurred in raising funds, as well as the exchange gains and losses and interest excluding fixed assets and intangible assets;

4. Personnel training fees. For example, the cost of employees going out to study during the preparation period, or the cost of technical guidance and training of experts to the unit;

5. Amortization, scrapping and damage of enterprise assets.

6. Other expenses. Such as: office expenses, business entertainment expenses, advertising expenses, stamp duty, vehicle and vessel tax, tolls and so on.

If the opening (preparation) expenses are not clearly listed as long-term amortized expenses in the new tax law, the enterprise can deduct them in a lump sum in the year on which it commences operation, or it can also be treated in accordance with the provisions of the new tax law on the treatment of long-term amortized expenses, but once selected, it shall not be changed.

The unamortized start-up expenses of an enterprise in the years before the implementation of the new tax law can also be treated in accordance with the above provisions.

According to the notice of the State Administration of Taxation on the connection of several tax matters of enterprise income tax (Guo Shui Han 2009 No. 98).

Start-up fee refers to the start-up capital that an enterprise or institution needs to pay at the time of establishment, which is used to pay for the relevant expenses and expenses of the enterprise when it is established, including but not limited to industrial and commercial registration fees, bidding deposits, license printing fees, rent, decoration, equipment procurement, human resources recruitment, etc.

In the early days of a business, there are a lot of start-up costs that don't usually translate into economic benefits right away. Therefore, the level of start-up costs will have a significant impact on the financial status and development of the enterprise, and it is also an important aspect of the company's cost and risk management.

In specific operations, the specific amount of start-up expenses and the payment method will vary depending on the size of the company, industry, geography and the items to be paid. Generally speaking, enterprises should make detailed planning and budgeting according to their actual situation, and formulate a plan and management process for the use of start-up expenses according to the actual situation to ensure the reasonableness and effectiveness of start-up expenses.

After the implementation of the new standard, newly established real estate development enterprises should strictly follow the provisions of the new standard to carry out the accounting treatment of start-up expenses. This not only simplifies the accounting of the sliding meter, but also reflects the accounting information more accurately. For the definition of the preparatory period, it is more appropriate for a real estate enterprise to start from the date of approval of the establishment to the date of establishment indicated on the business license.

Start-up expenses refer to the expenses actually incurred by the enterprise during the preparation period, including employee salaries, office expenses, training expenses, travel expenses, printing costs, registration fees and other expenses of the preparatory personnel.

When the unit incurs start-up expenses, the accounting treatment is: borrow: management expenses - start-up expenses, credit: bank deposits and other accounts.

1. One-time deduction in the current year on the date of commencement of operation. In this way, the deduction method of start-up expenses is in accordance with the treatment methods of the "Accounting System for Business Enterprises" and the "Accounting System for Small Enterprises" in the tax law. The Notice of the Ministry of Finance on Printing and Distributing the Accounting System for Small Enterprises (Cai Hui 2004 No. 2) and the Accounting System for Business Enterprises (Cai Hui 2000 No. 25) both stipulate that, except for the purchase and construction of fixed assets, all expenses incurred during the preparation period shall be collected in the long-term amortized expenses first, and shall be included in the profit or loss of the month in which the enterprise starts production and operation.

That is to say, whether it is the implementation of the "Accounting System for Small Enterprises" or the implementation of the "Accounting System for Business Enterprises", the deduction of start-up expenses can be deducted (collected) in a lump sum from the month of production and operation. However, according to the Notice of the Ministry of Finance on Printing and Distributing Accounting Standards for Business Enterprises No. 1 - 38 Specific Standards for Inventory and Other Standards (Cai Kuai 2006 No. 3) and the Notice of the Ministry of Finance on Printing and Distributing the Guidelines for the ——— Application of Accounting Standards for Business Enterprises (November 2006 Edition), the start-up expenses incurred by an enterprise during the preparation period shall be directly deducted from the month in which they occur. There is a certain difference between the "direct deduction from the month of occurrence" and the one-time deduction that an enterprise can make in the current year on the date of commencement of operation as stipulated in the National Tax Letter 2009 No. 98, and the enterprise should pay attention to the difference in this item.

Therefore, under this method, the amortization time of the start-up expenses, regardless of when the enterprise was established and regardless of the accounting system implemented by the enterprise, is the date on which the enterprise commences operation, not the period in which the start-up expenses are incurred.

2. It shall be handled in accordance with the provisions of the new tax law on long-term amortized expenses. According to Article 70 of the Enterprise Income Tax Law, start-up expenses can be regarded as long-term amortized expenses, which can be amortized in installments starting from the month following the month in which the expenditure is incurred, and the amortization period shall not be less than 3 years. However, this amortization method is different from the aforesaid treatment method.

It should be pointed out that the above two treatment methods are mainly for newly established enterprises in 2008, or enterprises established before 2008 but started production and operation in 2008. Whatever approach is used to deal with start-up costs, once chosen, they cannot be changed.

3. The unamortized part of the start-up expenses of previous years can be deducted in a lump sum in 2008 or amortized in installments. Article 34 of the original Detailed Rules for the Implementation of the Provisional Regulations on Enterprise Income Tax stipulates that the start-up expenses incurred by an enterprise during the preparatory period shall be deducted in installments within a period of not less than 5 years starting from the month following the month in which production and operation begins. For the unamortized start-up expenses of enterprises in the years before the implementation of the new tax law, the National Tax Letter 2009 No. 98 stipulates that they can be treated in the above two ways.