Investment allowance reserve.
This query is : Resolved
BISHNU DEO SHARMA
(Querist)
07 March 2009
Pls. guide me what is Investment allowance reserve, and his treatment.
Manmohan ACA, CS
(Expert)
16 March 2009
investment allowance reserve is a tax concept u/s 32 of income tax act which has been omitted from teh act since 2001-02.Such reserve is required to be made for 8 years otherwise exemption provided earlier under under income tax act shall be revoked.
in accounts it is like a ordinary reserve
in case of amalgamation entry is made as follows as per AS-11
So at the time of amalgamation a symbol entry is made in the books of purchasing company
Statutory reserve a/c dr.
To investment allowance reserve
And after completion of specified period it is reserved
In the books of selling company(amalgamating co.) it is treated as profit and loss accounts
regards...........!
in accounts it is like a ordinary reserve
in case of amalgamation entry is made as follows as per AS-11
So at the time of amalgamation a symbol entry is made in the books of purchasing company
Statutory reserve a/c dr.
To investment allowance reserve
And after completion of specified period it is reserved
In the books of selling company(amalgamating co.) it is treated as profit and loss accounts
regards...........!
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