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Mobile handset expenses

V AGARWAL (Director) (177 Points)

03 September 2011

Expenses incurred for Purchase of Mobile Handset , would be treated as Capital Expenditure or Revenue Expenditure?

What if the expenses is only Rs.18000/-

Pelase reply.

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15 Replies

Pralay Chakraborty (Service) (482 Points)
Replied 03 September 2011

For what purpose you bought it that will matter.

Thanks,

CMA. Pralay Chakraborty

(Cost & Management Accountant)

Rajagopalakrishnan R (PARTNER) (1417 Points)
Replied 03 September 2011

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

V AGARWAL (Director) (177 Points)
Replied 03 September 2011

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

vivek (self) (71 Points)
Replied 03 September 2011

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

answer will differ on these grounds

Nitin Garg (CA FINAL Article Trainee B.com) (171 Points)
Replied 03 September 2011

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

CA ADITYA SHARMA (CA IN PRACTICE ) (16719 Points)
Replied 03 September 2011

CAPIAL EXPENDITURE

Pralay Chakraborty (Service) (482 Points)
Replied 03 September 2011

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

ankur bansal (CA Final) (student) (124 Points)
Replied 04 September 2011

Treat it as as a capital exp..

dep. is allowable on this

Sirisha (Articles CA final student) (71 Points)
Replied 04 September 2011

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..

1 Like

TRILOCHAN (SENIOR ACCOUNTANT) (698 Points)
Replied 05 September 2011

To be captialise and depriciation to be charged @ 15%

VIJAYKUMAR (CHARTERED ACCOUNTANT) (203 Points)
Replied 05 September 2011

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

satish kumar Chauhan (accountant) (344 Points)
Replied 06 September 2011

chandrakant shah (professor) (31 Points)
Replied 08 September 2011

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%.

Pranab Chakraborty (student) (57 Points)
Replied 23 December 2011

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.