Max Payne (~) (26 Points)
03 October 2009Hi, 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?
Harshad Patil
(Industrial Training)
(130 Points)
Replied 03 October 2009
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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