How Should Companies Handle Depreciation for High-Cost Mobile Devices? Seeking Advice

Dear Friends,

Please let us know when the company owns a mobile instrument, such as a BlackBerry or similar device, where the cost of the instrument exceeds Rs. 5000.

As per normal policy, it should be capitalized. However, considering the challenge of tracking and the materiality of items in value compared to the total fixed assets, it is not feasible to monitor all of this.

Please suggest and provide any necessary references to applicable Accounting Standards if needed.

Thanks,
Dinesh

Dinesh, it should be capitalized and do not charge to P&L A/c. Please refer to AS 10 on Accounting for Fixed Assets.

Hi Anurag,

Please find attached the policy herewith, which includes references from AS-10, AS-6, and Schedule XIV of the Companies Act.

Upon overall review, it appears that the company's management has the authority to decide on charging it off, and the responsibility lies with the company's management to substantiate the materiality concept in this regard.

I have also learned from friends that many companies charge it off to the P&L if their balance sheet size is large.

Thank you.