Fixed assets

Hi! Here i am in a Co. Audit(Listed co.) I had a hot discussion with the Accounts GM whether a Table Tennis board (Rs 20k)  purchased for Staff should be capitalised or not.

I am of the view it should not be. Bcos it is purely for staff Welfare and it wil attract FBT.

But he questioned me whether a Gymnasium built for staff for Rs 10 lacs(say) could be charged to Revenue?????

Please help me out........

Replies (2)
As per the definition given for FA in AS- 10 Accounting for FA, " An asset held with intention of bieng used for the pupose of producing or providing goods or services and is not held for sale in the normal course of business". In your case the Table Tennis board purchased is not for sale, but to provide for staff entertainment. Indirectly, it may boost the production or services. However it can be used for more than a year or so. In my opinion it should be capitalised.

Thanks.... I agree with u

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