Purchasing of mobile sim card and mobile set

Hello everyone

I have a question regarding accounting matters.If an office purchases mobile sim card and mobile set for company's head office's staff then which head of accounts should that cost be put in? I guess they should be put in Office maintenance or telecomunication expense.Am i right?

Thanks in advance

 

Replies (8)
If the cost is below 5000 you can do so. Otherwise capitalised as fixed asset and claim depreciation

it will got under notes to other expenses  as

 

:--postage,telegram & telephone expenses

As per companies Act,2013, schedule II, the act was silent in Cost of asset is below or equal to Rs.5000/-

As per my interpretation, it should considered as Fixed asset,

 

There is no concept of 5000 in accounts.its a materiality concept which is generally used by company as a policy.therefore they use to write in notes that capitalisation below 5000 is to be expensed off.In such a case u have to capitalise the mobile with sim as per AS 10.in general also check for its economical benefit to company not its amount.
You have to capitalise all amount as according to AS-10

if cost of value high comes under fixed tengible asset for both SIM and mobile with purchase price. the expenditure incurred on monthly telephone bill comes under Communicaton charges under Expenses

 

It should be capitalised as per AS 10. If the cost is less than Rs. 5000 claim 100% depreciation in the year of purchase. Otherwise depreciation should be claimed of normal rate i . e. 15 %.

Companies Act 2013 does not specify any limit for Capitalization Or Expense. So i think, its depend upon management judgement whether to capitalize or not. If amount is not material as compare to turnover of company then expense otherwise Capitalize.

 

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