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Moneycontrol.com India | Accounting Policy > Computers - Software Medium/Small > Accounting Policy followed by WEP Solutions - BSE: 532373, NSE: N.A
WEP Solutions
BSE: 532373|ISIN: INE434B01029|SECTOR: Computers - Software Medium/Small
, 16:01
WEP Solutions is not listed on NSE
Mar 12
Accounting Policy Year : Mar '13
1.1 Basis of preparation of financial statements
 The Financial Statements are prepared as a going-concern under
 historical cost convention on an accrual basis and in accordance with
 the provision of section 211(3C) and other provisions of the Companies
 Act, 1956.
 1.2 Use of Estimates
 The preparation of financial statements in accordance with the
 generally accepted accounting principles requires management to make
 judgments, estimates and assumptions that affect the application of
 accounting policies and the reported amounts of assets and liabilities,
 income and expenses. Estimates and underlying assumptions are reviewed
 on an ongoing basis. Revision to accounting estimate is recognised in
 the period in which the estimates are revised and in any future period
 1.3 Fixed assets, intangible assets, leased assets and work-in-progress
 Fixed assets are stated at historical cost less accumulated
 depreciation. Costs include expenditure directly attributable to the
 acquisition of the asset. Borrowing costs directly attributable to the
 construction or production of qualifying assets are capitalized as part
 of the cost.
 Intangible assets are stated at the consideration paid for acquisition
 less accumulated amortization.
 Advances paid towards the acquisition of fixed assets outstanding as of
 each balance sheet date is shown as capital advance and the cost of
 fixed assets not ready for use before such date are disclosed as
 capital work in progress.
 Leases where the lessor retains substantially all the risks and rewards
 of ownership are classified as operating leases.  Lease rentals in
 respect of assets taken under operating leases are charged to profit
 and loss account on a straight line basis over the lease term.
 Spares issued for fixed assets after the depreciated life of the
 original asset are capitalised.
 1.4 Depreciation and amortization
 Depreciation on fixed assets is provided at the rates prescribed in
 Schedule XIV to the companies act,1956, or at the rates determined
 based on the useful life of the asset, as estimated by the management,
 which ever is higher.  Depreciation is provided based on the straight
 line method.  The rates adopted for the depreciation determined on the
 basis of useful life of fixed assets are as follows:
 Spares issued for Computer Peripherals - on use and pay, after
 completion of useful life of the original asset are capitalised and
 depreciated over 24 months.
 Individual Assets costing less than Rs. 5,000 are depreciated in full in
 the year of purchase.
 Depreciation for assets purchased / sold during the period is
 proportionately charged.
 Intangible assets are amortized over their respective individual
 estimated useful lives on a straight-line basis as follows:
 1.5 Impairment of Assets
 An asset is treated as impaired when the carrying cost of asset exceeds
 its recoverable value. An impairment loss is charged to the Profit and
 Loss Account in the year in which an asset is identified as impaired.
 The impairment loss recognised in prior accounting period is reversed
 if there has been a change in the estimate of recoverable amount.
 1.6 Borrowing Cost
 Borrowing Cost incurred in connection with borrowing of funds for the
 acquisition, production or construction of an asset that necessarily
 takes substantial period of time to get ready for its intended use /
 sale are capitalised as part of that assets. Other borrowing costs are
 recognised as an expense in the period they are incurred.
 1.7 Inventories
 Inventories are valued at lower of cost or net realizable value,
 including necessary provision for obsolescence. Cost is determined
 using the weighted average method.
 1.8 Contingencies and events occurring after the Balance Sheet date
 Accounting for contingencies (gain or loss) arising out of contractual
 obligations are made only on the basis of mutual acceptance.
 Event occurring after the date of Balance Sheet are considered upto the
 date of approval of the accounts by the Board of Directors, where
 1.9 Foreign Currency Transactions
 Transactions denominated in foreign currencies are recorded at the
 exchange rate prevailing on the date of the transaction or that
 approximates the actual rate at the date of the transaction.
 Monetary items denominated in foreign currencies at the year end are
 restated at year end rates. In case of items which are covered by
 forward exchange contracts, the difference between the year end rate
 and rate on the date of the contract is recognised as exchange
 difference and the premium paid on forward contracts is recognized over
 the life of the contract.
 Non monetary foreign currency items are carried at cost.
 1.10 Revenue Recognition
 Sales of Product/Service are accounted net of Excise duty, Sales Tax
 /VAT, Service Tax and discounts on accrual basis.
 Agency Commission is accrued on shipment of consignment by Principal
 and Other income is recognised on accrual basis.
 1.11 Employee Benefits
 Gratuity: The Company provides gratuity benefit to the employees which
 is defined benefit plan and the obligation of the company is calculated
 on the basis of actuarial valuation.
 Leave Accrual: The Company allows accumulation / encashment of leave.
 Such accumulation can be utilized by
 obtaining leave in the subsequent period of employment or at the time
 of separation for a specified period. The obligation as on the balance
 sheet date is provided on the basis of actuarial valuation.
 1.12 Tax Expense
 Current tax on income for the current period is determined on the basis
 of taxable income and tax credits computed in accordance of the
 provisions of the Income-tax Act, 1961, and based on expected outcome
 of assessments/appeals.
 Deferred tax is recognised on timing difference between taxable and
 accounting income for the year and quantified using the tax rates and
 laws that are enacted or substantively enacted as on the balance sheet
 Deferred tax asset relating to unabsorbed depreciation / business
 losses/ losses under the head  capital gains are recognised and
 carried forward to the extent that there is a virtual certainty that
 sufficient future taxable income will be available against which such
 deferred tax assets can be realised
 Other deferred tax assets are recognised and carried forward to the
 extent that there is a reasonable certainty that sufficient future
 taxable income will be available against which such deferred tax assets
 can be realised.
 1.13 Provisions and contingent liabilities
 Provisions are recognised when the Company has a present obligation as
 a result of past event, it is probable that an outflow of resources
 will be required to settle the obligation, and a reliable estimate can
 be made of the amount of obligation.
 A disclosure for a contingent liability is made when there is a
 possible obligation or a present obligation that may, but probably will
 not, require an outflow of resources. Where there is a possible
 obligation or a present obligation in respect of which the likelihood
 of outflow of resources is remote, no provision or disclosure is made.
 Legal provisions are made as per the requirements of the applicable
 legislation. Warranty provision is arrived at considering the warranty
 period and the rate of failures determined from historical information.
 They represent the best estimate of likely expenses during the
 unexpired warranty period.
 1.14 Research & Development
 The company incurs certain expenditure for new product development or
 upgradation of features in the existing products. Any revenue
 expenditure incurred is charged off during the quarter in which it is
 incurred. Any capital expenditure is shown as addition to fixed assets.
Source : Dion Global Solutions Limited
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