Hi, My company uses the telephony service from the local wireless provider. Through our usage of their service we accumulated loyalty points & the wireless provider announced that anyone who redeems the point upto a certain threshold will be offered a free mobile phone. Our company had lots of point & we took this oppurtunity to redeem points. Therefore we received a brand new mobile phone. How do we account this transaction in book of accounts?
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Winning company received Gift
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The transaction has been effected wher infow of a goods wud b of a capital nature if being purchased.
here, since you havent purchased, its still to be disclosed as an asset in the B/S. such asset needs to b disclosed at a nominal value of Rs.1/-. This is so to disclose such an asset in Financial statement and at a value not material for cash outflow. Refer AS10
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