What expense category are incorporation fees?

The answer to this question depends on the business and the specific circumstances under which the incorporation fees were incurred. Generally speaking, incorporation fees could be classified as either a start-up cost or an ongoing expense.

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As a start-up cost, incorporation fees would be considered part of the cost of starting the business and would be expensed in the period in which the business is created. As an ongoing expense, incorporation fees would be considered part of the cost of doing business and would be expensed in the period in which they are incurred. The specific classification of incorporation fees would need to be determined on a case-by-case basis.

Start-Up Costs

Incorporation fees incurred as part of the start-up of a business would be considered a startup cost. These costs would be expensed in the period in which the business is created. The start-up costs of a business are typically expensed in the first year of business.

Ongoing Expenses

Incorporation fees incurred as part of the ongoing operation of a business would be considered an ongoing expense. These costs would be expensed in the period in which they are incurred. The ongoing expenses of a business are typically expensed in the year in which they are incurred.