Financial Risk Manager

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Accounting Treatment of Mobile Phones and Depreciation
Friday, March 27, 2009

An Asset is a resource:

a) controlled by an entity as a result of past events; and
b) from which future economic benefits are expected to flow to the entity (Source: IAS-38).

Further, Property, Plant and Equipment are tangible items that:

a) are helf for use in the production or supply of goods or services, for rental to others, or for administrative purposes; and
b) are expected to be used during more than on e period. (Source: IAS-16)

If mobile phones are purchsed for the purpose mentioned above then these would be catagorised as Equipment or specifically as mobile phones as well if the its figure is very material with reference to assets of the company.

Depreciation is the systematic allocation of the depreciabale amount of an asset over its useful life. So if the company has intention to separately catagorised then rate should be charged according to their useful life otherwise if these are shown under Equipment then same rate that equipments are being charged as depreciation.

Labels: accounting

posted @ 1:37 PM,

5 Comments:

At August 6, 2009 at 12:13 PM, Anonymous said...: thanks for your information but one thing which is in the definition of Asset is the durability while mobile durability cant be calculated so what about this.
please inform me on this email address mujahidlatifcma@hotmail.com
i will wait for ur reply
At August 6, 2009 at 4:53 PM, Imran said...: In addition to the above identified issue. i would also like to mention that the cost of mobile vary widely. the cost can be 2000 or more than 60,000 another prb is it can be snatched easily. What is ur opinion abt this ? ? ? ? isnt it good to charge the mobile phone to p&l ?
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