Bank deposits
This query is : Open
04 October 2012
When a bank deposit can be classified as investment.
04 October 2012
Bank Deposits should be classified under Cash and Cash Equivalents
04 October 2012
As per Clause 6Q of part 1 of the revised schedule VI of the Companies Act,1956, companies have to classify bank deposit under the head 'Cash and Cash Equivalents'. Further separate disclosure is required for those bank deposits with > 12 months remaining maturity period.
04 October 2012
Agreed with the Experts
05 October 2012
Schedule VI tells the presentation and AS prevails over schedule VI. And according to AS, "Investments are assets held by an enterprise for earning income by way of
dividends, interest, and rentals, for capital appreciation, or for other benefits
to the investing enterprise."
It means any asset held for earning interest is investment. So bank deposit also qualifies as investment.
dividends, interest, and rentals, for capital appreciation, or for other benefits
to the investing enterprise."
It means any asset held for earning interest is investment. So bank deposit also qualifies as investment.
05 October 2012
When we classify it as an Investment then we should apply AS 13 and present along with investments and not in Cash & Bank balances.
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