As-12 accounting for investment.
This query is : Resolved
23 July 2012
Dear All Expert,
Pl address the following issue.
One Indian Pvt ltd company has acquired substantial shares in one foreign company, which is listed outside India. Company has also enter into agreement with this foreign co. to supply of technical know how to the investor co. Investment by Indian co in to foreign co is also covered in the agreement of Supply of Know how.
Further, Indian company has appointed its nominee on the BOD of foreign co. for this purpose Indian co has paid Rs. 10 lacs to the stock exchange on which foreign co is listed as a Verification fess as per norms of foreign stock exchange.
Now,
Whether AS per AS-13, Rs. 10 lacs can be a cost of Investment of the Shares acquired in the foreign co. ??
Thanks & Regards,
Vikas
Pl address the following issue.
One Indian Pvt ltd company has acquired substantial shares in one foreign company, which is listed outside India. Company has also enter into agreement with this foreign co. to supply of technical know how to the investor co. Investment by Indian co in to foreign co is also covered in the agreement of Supply of Know how.
Further, Indian company has appointed its nominee on the BOD of foreign co. for this purpose Indian co has paid Rs. 10 lacs to the stock exchange on which foreign co is listed as a Verification fess as per norms of foreign stock exchange.
Now,
Whether AS per AS-13, Rs. 10 lacs can be a cost of Investment of the Shares acquired in the foreign co. ??
Thanks & Regards,
Vikas
24 July 2012
If it is a payment not directly related to purchase, then it may not be eligible for capitalisation.
As understood, the fees paid are in relation to getting a board seat in the company.
You may explore Intangible asset category for capitalisation under AS 26.
As understood, the fees paid are in relation to getting a board seat in the company.
You may explore Intangible asset category for capitalisation under AS 26.
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