Hello,
My investments face values is 50,000
in books it is shown as 45,000
assets rs
invstment(face value 50,000) 45000
now if i sold investment for rs 40,000.
Then my loss will be 5000 or 10,000?
Ankit
(CA, CS)
(3064 Points)
Replied 29 August 2013
Ankit
(CA, CS)
(3064 Points)
Replied 29 August 2013
CA LOVELY ARORA
(C.A. B.Com (H) Graduate)
(2151 Points)
Replied 29 August 2013
Dear Tanuja,
loss will be Rs. 5000 (40000-45000), assuming that the diminution in the value of investment (from 50000 to 45000) in books was on account of permanent diminution, not a temporary ones. (cosidering long term investments)
Best Regards,
CA Lovely Arora
ca.lovelyarora @ gmail.com
Sanjay Ghewade
(Finance Professional)
(56 Points)
Replied 02 September 2013
current WDV of your investment is Rs. 45000/- and if you are selling it for Rs. 40000/- your loss on sell of investmetn is Rs 5000/-
CA. Mayur
(Service)
(147 Points)
Replied 23 September 2013
According to AS 13 the acquisition of any investment need to be valued at cost or fair value whichever is low, so presuming the cost is lower than the fair value than recognition at 45,000 on acquiring investment is correct. As per para 21 of AS 13 the on disposal of investment difference between carrying amount and the sales proceeds net of expenses will be recorded to P&L.
Therefore based on above guidance of AS 13, the loss of Rs 5000 be recorded in P&L.
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