Accounting for shares

I have an query, please help..

A company is holding some shares as stock in trade. As per AS its valuing the shares at cost or market value whichever is less. 

Say the original cost of shares was Rs 1000.. In earlier years it was valued downwards to 200 as per market rate. In the current year the market value of the shares have risen to Rs 300. The company is accounting for profit of Rs. 100 as per its books. 

Is it tenable..

Please reply..

Replies (2)

yes, it is right, since as per AS 2 you have to value ur stock at market price or cost which ever is less, since market price Rs. 300/- is less then cost i.e., Rs. 1000/-, hence comany sholud value the stock at Rs. 300/- i.e., increse of Rs. 100/- from last year.

can u tell me , what will be tally entries of valuation of closing stock , if we revalue it on Net Realisable Value.... is revaluation of Closing Stock of Shares is an expense or Reseve ???

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