05 November 2012
Hii Frndz... A co. purchased a mobile worth Rs. 3500. Either it will to be added in fixed assets or shown as office expenses. Explain me with matariality concept of accounting.
05 November 2012
Material items means any any item the disclosure or non disclosure of which may affect the decision of vested interested in the organisation. In other words the decision taken by those associated parties would have been different, had this information been disclosed or not disclosed. Materiality is not a cut off figure, nor it can be standardised for every organisation. It may vary from organisation to organisation. E.g Rs.5 Lakhs may be material for any small companies but the same may not be material for Reliance Industries. In your case better mobile exp. should be written off, as companies act also allows write off of any capital expenditure of Less than Rs. 5000 fully in the year of purchase itself
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