Bank deposits

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A.Sunil kumar

A.Sunil kumar (Querist)
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04 October 2012 When a bank deposit can be classified as investment.

CA.Vinita Gupta

CA.Vinita Gupta (Expert)
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04 October 2012 Bank Deposits should be classified under Cash and Cash Equivalents

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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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.

SANYAM ARORA

SANYAM ARORA (Expert)
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04 October 2012 Agreed with the Experts

A.Sunil kumar

A.Sunil kumar (Querist)
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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.

A.Sunil kumar

A.Sunil kumar (Querist)
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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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