Finance Manager

Hi all,

We have this pecular issue, where a pharma Co gives some items to its doctor (material items fridge, tv, Ariconditioner) for refering their medicines. However, there is no conditions attached with the distribution of such items. If as at the year end the Pharma Co. holds some of these items, will these be classified as assets? Or the Pharma Co. should expense such items as and when they are purchased/procured by that Pharma Co.

Point to note here is that the Pharma Co. has no use of these items other than giving them away to the doctors.

Plz advice.

They should be capitalized when acquired (as inventory or accruals). When they are distributed, they should be expensed as distribution expenses.

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