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46. What are the expenses that the SEBI permit to be amortized?
Ans: The expenses incurred during the launch of a scheme cannot be charged on investors in the first year; but should be spread over the year .SEBI permits amortization of these expenses as follows:
- For a close -ended schemes floated on a ' load ' basis , the initial issue expenses shall be amortized on a weekly basis over the period of the scheme
- In case of open -ended scheme floated on a 'load' basis , the initial issue expenses may be amortized over a period not exceeding five years . Issue expenses incurred during the life of open-ended schemes shall not be amortized
- Unamortized portion of initial issue expenses shall be included for NAV calculation under head ''other assets''.