Maslins
7th March 2009, 08:59
Not a big issue, but I was just reading a thread about mobile broadband, and how on some services if you pay a little more monthly, you get a free laptop (or similar).
Firstly, how would you go about this from an accounting/tax point of view? Eg would you treat it as described by the vendor, that the asset costs £nil, but then obv the service is a little overpriced. Or, would you try to decide a market value for the laptop and capitalise it with an accrual, that you'd release over the life of the service (eg £20/month service, say £10/month is for laptop, £10/month is actually revenue for service).
That then also got me thinking (I'm young as accountants go) what if you got one that came with a free Xbox 360 or similar. So a business service, that comes with a free (blatantly non-business) asset. Could you simply enjoy the console basically as a business expense because it came "free" due to you paying a higher monthly charge for a service?
Firstly, how would you go about this from an accounting/tax point of view? Eg would you treat it as described by the vendor, that the asset costs £nil, but then obv the service is a little overpriced. Or, would you try to decide a market value for the laptop and capitalise it with an accrual, that you'd release over the life of the service (eg £20/month service, say £10/month is for laptop, £10/month is actually revenue for service).
That then also got me thinking (I'm young as accountants go) what if you got one that came with a free Xbox 360 or similar. So a business service, that comes with a free (blatantly non-business) asset. Could you simply enjoy the console basically as a business expense because it came "free" due to you paying a higher monthly charge for a service?