Mobile handset expenses

For what purpose you bought it that will matter.

Thanks,

CMA. Pralay Chakraborty

(Cost & Management Accountant)

Depends on you policy of Capitalisation regularly followed. Under companies act phones upto 5000/- each can be charged at 100% depreciation.

Suppose there is no policy and we have to suggest the client? For what purpose means...pl give example.

Mobile is purchased for personal purpose or company deals in mobile?

answer will differ on these grounds

Purchase of Mobile Set, use for business should be treated is capital expenditure...

CAPIAL EXPENDITURE                           

Originally posted by : V AGARWAL
	Suppose there is no policy and we have to suggest the client? For what purpose means...pl give example.

Ask ur client for what purpose they made the expenditure.. 

there is a difference b/w personal expenditure  & Business expenditure

Treat it as as a capital exp..

dep. is allowable on this

If the mobile is used for business purposes then it must be capitalised and depreciated as per applicable rates.. if it is used for personal purposes it must be charged to the respective personal account..

To be captialise and depriciation to be charged @ 15%

If you have bought  mobile for business then capitalise it., if amount exceeds Rs.5000/- each.

If the mobile is used for business purposes then it must be capitalised and depreciated as per applicable rates.. if it is used for personal purposes it must be charged to the respective personal account.

First of all we have to see that what would be the use of the mobile? If mobile is exclusively use for the business or professional purposes than it may be capitalised, if the cost of mobile is more than 5000.

If the mobile is for the personal and business purposes both then it can not be capitalised, only depreciation can be charged on the basis of use for the business. The applicable rate of depreciation is 15%.

AS WE ALL KNOW THAT EXP THAT INCURRED IN ONE TIME IS KNOWN AS CAPITAL EXP, BUT EXP INCURRED  REGULAR BASIS THAT SHOULD HAVE TO CHARGE REVENUE EXP. HERE MOBILE PURCHASED  SHALL HAVE TO BE TREATED AS CAPITAL EXPENDITURE.