should mobile phones be capitalised

Page no : 2

Ramdarash Prajapati (Manager-Accounts) (46 Points)
Replied 24 August 2010

Mobile phone shold be recorded in Revenue A/cs if purchase value is 5000/- or less.

Manikanta Raju CA,CWA,(CS) (Industry) (4482 Points)
Replied 24 August 2010

It depends on the value of the subjected item.....!!!

If the value is 5000/- or less then it will be charged to p&l A/C, if it is more than 5000/- the same will be capitalised...!!!

Chinmay (Accounts Professional) (356 Points)
Replied 24 August 2010

I agree with Faiz

Paras (Job) (90 Points)
Replied 24 August 2010

Mobile phones should be capitalised irrespect of amount and Company size.However, if the purchase bill is in favour of employee,the amount should be shown under "Staff welfare" and hence written off.

CA SHABIR (CA) (336 Points)
Replied 24 August 2010

In accordance with the provisions of copanies act (read with AS-10 & 6), if CoA of any asset exceed 5000.00, then it should be capitalized otherwise charge it to P/L A/c.

Thanks

nikhil (Article) (93 Points)
Replied 24 August 2010

Ya mobiles phone are to be capitalised only if it is exclusively used for the company use and are demanded back on completion of the work but if the same is given to the employee for the use of the company or are used semi officais and not to be demanded back are not to be capitalised. Wherein such mobile phones are to be treated as perquisets given to the employee and can be booked under the head of Emp. benifits.

Pankaj (AM - Finance & Accounts) (58 Points)
Replied 26 August 2010

It depends on the fact of each case. Among other factors such as ownership, whether mobile phone is to be return by employee if he resign or retire etc. materiality is very important factor. Remember accounting standards applies to material items only. What is material or not depend upon the case. If you have turnover and asset in crores of rupees would u consider 1 or 2 lakh to be material??? No. Hence depending upon situation you have to take decision.