E pass token revenue item or asset?

Save Share

This query is : Resolved

Quick Summary

This discussion explores the accounting treatment for an e-pass token purchased for Rs. 500. While the token itself might have a benefit exceeding 12 months, the associated Digital Signature Certificate (DSC) has a one-year validity and is expensed. The consensus leans towards expensing the token, especially if it falls below a company's capitalisation threshold for fixed assets. Businesses are advised to establish a clear policy for capitalising items based on cost.

k chakraborty

k chakraborty (Querist)
Follow

08 January 2024 Sir,
we purchase an e pass token ( usb token for DSC- computer acc.) recently, for Rs. 500/- . Given the fact that benefit derived from the item would be more than 12 months, i am wondering whether i should capitalise the item. Note the actual DSC ( the item that is downloaded in the usb token- shown differently in invoice) has one year validity and hence will be shown as expense

RAJA P M

RAJA P M (Expert)
Follow

09 January 2024 It's a expense. So, You can account in PandL.

Aashok Kumar Sharma

Aashok Kumar Sharma

(Expert)
Follow

14 January 2024 Businesses should adopt a capitalization policy establishing a INR amount threshold. Fixed assets that cost less than the threshold amount should be expensed.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now