12-20-2003, 05:36 AM
Zubair is right in so far as the valuation is concerned.
Prepaid cards NOT SOLD represent revenue capacity but do not have any intrinsic value unless activated. An activated prepaid card can be loaded/charged and is like cash. The cost of this cash to the company is not the cost of material of the card but the future USE OF NETWORK by the user when such card is loaded into the company's systems.
There is no need to value something which has no cost. However as part of the audit procedures and company's internal controls a full fledged system of inventory control should be implemented which tracks these cards from receipt from printing company to the ultimate sale to the consumer.
I hope it clarifies
Prepaid cards NOT SOLD represent revenue capacity but do not have any intrinsic value unless activated. An activated prepaid card can be loaded/charged and is like cash. The cost of this cash to the company is not the cost of material of the card but the future USE OF NETWORK by the user when such card is loaded into the company's systems.
There is no need to value something which has no cost. However as part of the audit procedures and company's internal controls a full fledged system of inventory control should be implemented which tracks these cards from receipt from printing company to the ultimate sale to the consumer.
I hope it clarifies
