UK Mobile phone contracts

[Jake93]

Hi all.

I'm looking for a bit of advice on how to record a mobile phone contract in my books.
Please forgive me as I am new to bookkeeping and am learning as I go. Let me know if I'm wrong in what I'm saying

So here's where I'm at...

I currently pay £94.30 (ex. VAT) per month for 2 connections. Purchased through Carphone Warehouse on the O2 tariff - billed by O2.
My invoice shows "Line rental: £94.30" - "Bill total: £94.30".

How do I determine (if necessary) how much of this bill would be classed as an asset (the cost of the handset), and how much would be the cost of the tariff?
I have never seen a full figure for the price of the phones, only the monthly totals, so am unable to calculate the difference.

Any and all advice is appreciated.

Cheers.

 

[Fidget]

Unless you're planning on capitalising the handsets, you don't need to separate the cost - just treat the lot as an expense. If you are planning on capitalising the handset then just work out the total cost of the contract - so if the tariff is set at £94.30 for 12 months, then it's £1131.60. You can then source the cost of the handset online as if you were just purchasing the handset only. That'll give you the cost to capitalise with the remainder being the revenue expense.

 

[Jake93]

Thank you, Fidget.
This has helped clear things up