Shrikant zawar (Chartered Accountant) (32 Points)
10 September 2009Dear Friends,
Please let me know whether items of fixed assets worth less than Rs.5000/- can be debited directly to P & L a/c instead of capitalising which can reduce the volume of fixed assets register for a listed co. Pl give reasoning as per laws and accounting standards.
hemal
(CA FINAL)
(176 Points)
Replied 10 September 2009
Fixed Assets below Rs.5000 is to be written off in 12 months from the date of its aquisition, only the depreciation of the months related to particular year is debited to P.L. account & also clearly idetifieble can not be matched with register maintained.
Ratan Deep Saxena
(Asstt Manager (Accounts & Finance))
(2998 Points)
Replied 10 September 2009
fixed asset below Rs.5000/- is liable to 100% depreciation as per companies act, but such assets cannot be directly debited to p&l a/c. only the depreciation thereon is debited to p&L a/c.
regards,
ratan
Shrikant zawar
(Chartered Accountant)
(32 Points)
Replied 10 September 2009
| Originally posted by :Ratan Deep Saxena | ||
| " | fixed asset below Rs.5000/- is liable to 100% depreciation as per companies act, but such assets cannot be directly debited to p&l a/c. only the depreciation thereon is debited to p&L a/c. regards, ratan |
" |
Thanks for your reply. But items like calculator, mouse, or such small items having very low value should be capitalised in a co with turnover of more than 1200 crores? The cost of maintaining Fixed Assets Register is very high as manpower is costly. As per As 10, an enterprise may expense out an item otherwise should have been an item of fixed asset because the amount is not material. Again whether this will affect clause 17(a) of Form 3CD( Tax Audit)? . I would like know what is practice followed in any listed co.
regards,
Shrikant Zawar
CAclubindia
