Hi, We are the company invested in Mufual Funds in Growth option. How we account the difference between Market Value(i.e Nav as on Reporting Date and NAV as on investment date). Can I account it as Dividend Income/Short term Gain?
Can I recognise the difference as Accrued but not realised under Mutual Funds?
I hope this helps.
Mutual funds are accounted on an accrual basis. On the reporting date, investments are recorded at the last quoted price on the principal exchange date. The increase in value of your mutual fund can be recorded in your books as dividend income on an accrual basis on the reporting date as "other income" under profit and loss account as per revised schedule VI.
Portfolio Valuation
Investment are stated at market/fair value at the balance sheet date/date of determination. In valuing the scheme's investments.
(i) Securities listed on a recognized stock exchange are valued at the last quoted price on the principal exchange on which the security is traded.
(ii) Money market instruments are valued at fair value as determined in good faith by Asset Management Company (AMC)
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