Please Help: Definition of EDP equipment as per Companies Act
Posted Date : 27-Sep-2011 , 04:52:54 pm | Posted By: CA. Jainendra Sahu
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Accounts | Answers :
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Comments :
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We have a smart card system for attandence recording of employees of the organisation in which category we should categorise this system for the purpose of depreciation, either office equipment or EDP items? |
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Answers:
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 Answer by: Neha Jain |
| Its a sort of office equipment.
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| Answer by: Ashish Karundia |
| Dear Friend,
I totally agree with Neha. Further, regarding you query for any basis, it may be noted that Fixed Assets are broadly categorized in heads such as.Land, Building, Furniture and fixture, Plant & machinery, Vehicle and office equipment etc. (thought there may be other categories also depending upon the nature of business). If you try to understand the meaning of a smart card, then you can easily come to a conclusion that the same cant be classified to any head other than office equipment. Further, it may be noted that the term 'electronic data processing item/equipment' is not defined in Companies Act, 1956, therefore, we have to understand to the common parlance meaning which provides that electronic data processing (EDP) equipment is a network of machine components capable of accepting information, processing it according to a plan and producing desired results. This equipment includes complete workstations, peripheral equipment (printers, scanners, LCD projectors), laptops, servers, etc.
In the instant case, the smart is not able to satisfy the above definition. However, the same can be argued by saying that the same accepts (when the employee punches the card in the morning), process and produce results (attendance records at the end of month) and is therefore qualifies the definition of Electronic Data Processing. Also such a view will also be contradictory to the practice currently prevalent in the industry.
Hope this suffice the above.
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| Comments |
| Posted By : CA VIPIN GARG |
28-Sep-2011, 08:54:35 |
| Perfectly said by Ashish Ji and Neha Ji........ |
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| Posted By : CA. Jainendra Sahu |
27-Sep-2011, 05:28:25 |
| Thanx nehaji
can you give any basis..
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