01-29-2010, 07:07 AM
Dear all,
I agree with the point made by wsafca a company can expense expenditure made on immaterial items (that otherwise meet the criteria for capitalization). Materiality is defined by the company keeping in view its definition (information that my affect the decision making of the users) and not by the auditors.
<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica, san" id="quote">quote<hr height="1" noshade id="quote"><i>Originally posted by ibin</i>
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we do have a policy of expensing some minor assets the policy says âExpenditures on furniture, office equipment, workshop tools and other minor assets are written off during the year of acquisition. However, they are recorded in memoranda registers.
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In my personal opinion the stated policy may not be in exact conformity by the provisions of relevant standard. It could be said that"expenses that otherwise meet the capitalization criteria below a particular threshold are written-off during the year of purchase" instead of stating to expense a whole class of assets like furniture and office equipment. Again I say I even do not find this change very much necessary however leaves lesser ground for the auditors to disagree.
The opinion is based on what I learnt as an accountancy student and through the practical exposure I had and may be incorrect.
Regards
Shoaib
I agree with the point made by wsafca a company can expense expenditure made on immaterial items (that otherwise meet the criteria for capitalization). Materiality is defined by the company keeping in view its definition (information that my affect the decision making of the users) and not by the auditors.
<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica, san" id="quote">quote<hr height="1" noshade id="quote"><i>Originally posted by ibin</i>
<br />
we do have a policy of expensing some minor assets the policy says âExpenditures on furniture, office equipment, workshop tools and other minor assets are written off during the year of acquisition. However, they are recorded in memoranda registers.
<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">
In my personal opinion the stated policy may not be in exact conformity by the provisions of relevant standard. It could be said that"expenses that otherwise meet the capitalization criteria below a particular threshold are written-off during the year of purchase" instead of stating to expense a whole class of assets like furniture and office equipment. Again I say I even do not find this change very much necessary however leaves lesser ground for the auditors to disagree.
The opinion is based on what I learnt as an accountancy student and through the practical exposure I had and may be incorrect.
Regards
Shoaib
