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Startup Costs and Yr 1 Statements

    • 59 posts
    April 14, 2008 10:33 AM EDT
    If I understand your question correctly, you are just wondering when, for financial projections, your startup period ends and your first year in business begins.

    To some extent, the distinction is arbitrary. You could just as easily create your financial statements without labeling them at all. (Note that the definitions of how costs are dealt with for tax purposes may vary - see an expert.)

    I would think that you could safely call your first 7 months your startup period, and just start Business Year One the next month, but as long as the numbers work it shouldn`t matter too much.

    Good luck!

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    • 1 posts
    April 11, 2008 2:21 PM EDT

    Hello Everyone,

    Need some help in figuring out where startup costs and Yr 1 costs end or merge.

    My business plan is about a website.  It will take 7 months to develop, etc.  So, I have calculated my startup cost for all expenses incurred until the site goes live. 

    Problem:
    When creating Yr 1 financial statements i.e cash flow, income stat, & balance sheet do I add startup costs (7 months) to the 3 months left in the year and call it my Yr 1 financial statements?

    Or does Yr 1 begin in the 8th month?  If yes, how do I deal with startup costs for financial statement situation.

    Thanks,
    Sami142