Dear All
Whether TATA Photon Plus (40Nos) purchased by an IT company would be treated as expenditure or will it be capitalized.
Thanking You
Ravi
15 Replies
Madhusudan Kabra
(knowledge seeker)
(1779 Points)
Replied 13 January 2011
Dear Ravi,
Internet card once purchased by company is a property of company and it should be capitalised but if you think practically it has no market value after purchasing ........because this are not transferable.
Hence in my opinion it should be charged to P&L a/c in same year.....
Regards
Madhusudan
Suresh Prasad
(www.aubsp.com)
(15630 Points)
Replied 13 January 2011
It Should be charged to revenue A/c and not be regarded as Assets for the IT Co.
Kishore N S
(Salaried Employee)
(39 Points)
Replied 13 January 2011
I think Cost of each photon plus is less than 5000/- hence there is no need to break the head. you can charge to p & l account
Madhusudan Kabra
(knowledge seeker)
(1779 Points)
Replied 13 January 2011
Dear Kishore ji
There r 40 nos of TATA data card ........ hence collectivly it is a very big amount....
would your answer still remain same.
regards
Madhusudan
Navin. M. J
(Fresh Chartered Accountant)
(103 Points)
Replied 13 January 2011
When taking into consideration 40 nos of same items, cost of individual item should be checked. individually if its less than Rs 5000/- then the same is taken to profit and loss account. besides the guarantee for the item does not exceed one year.there is no long term benefit. my opinion is take it to profit and loss account.
Rajeev Kumar singh
(Article)
(36 Points)
Replied 13 January 2011
It should definately a revenue item because Company have to Pay regular its subscrition
Vivek Raju P
(Manager)
(614 Points)
Replied 13 January 2011
capitalise them and then charge off 100% depreciation in the same year as value is less than 5000. This will ensure tracking of them as assets at a later stage and any loss may be charged to the employees.
Charging them to expenses instantly may not be a good practice, unless there is a very good tracking mechanism for small items.
Satvir Singh
(Newly minted CA)
(1733 Points)
Replied 15 January 2011
i think it should be capitalized..They can be used for period of more than one year & Total amount of 40 pcs will be material.
Madhusudan Kabra
(knowledge seeker)
(1779 Points)
Replied 15 January 2011
I m fully agreed with Answer of Mr. Vivek ....because amount of 40 nos is material in it self ....same can not be charged directly to revenue ....
Regards
Madhusudan
Gulshan Kumar
(Professional Accountant)
(119 Points)
Replied 15 January 2011
charged to p&l account as revenue exp bcoz no market value.
NARENDER PAWAR
(CA final Student)
(337 Points)
Replied 19 January 2011
its should be treated as an expenditure in the books of acccounts.
CA Ashish Bansal
(Manager Finance & Accounts)
(73 Points)
Replied 19 January 2011
As a normal practice it shud be charged to expenditure
Recent Topics
- NRO Interest - Taxed at source and in Foreign Coun
- Clarity needed on effective date
- Income Tax Refund Deadline Shortened to Five Years
- Rectification Applications for Past GST Demands
- Where can I find a trusted provider to hire a skip
- GST Invoices Series
- FILING OF ITR AY 20-21
- CLAIMING OF U CLAIMED RCM
- Building construction works
- REGARDING GSTR-9 F.Y 2023-24
Related Threads
CAclubindia
