AS-13

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why is any consideration received incase of sale of rights is asjusted againast investments?

Replies (3)

I am not an expert but let me put my views.Rights are Premptive Rights as per Sec81.If u have acquired Rights  then it would add to cost of Investments.If u have Renounced the rights nothing need to be done but in case if u have sold the rights it has to be deducted from cost of Investments  since  your ownership is transfered

 

waiting for bright students comment on this please 

Originally posted by : sivaram


I am not an expert but let me put my views.Rights are Premptive Rights as per Sec81.If u have acquired Rights  then it would add to cost of Investments.If u have Renounced the rights nothing need to be done but in case if u have sold the rights it has to be deducted from cost of Investments  since  your ownership is transfered

 

waiting for bright students comment on this please 

but if u dont acquire those rights and sold to the third party in consideration of some nominal value...

then why it is related with the investment cost...

the entry was:

bank a/c...dr

 To sale of rights a/c...cr

_________________________________________

sale of rights a/c...dr

 To investments a/c...cr

This doubt i too had it seems to be like this

Since right is preemptive ie u being the previous shareholder you are alloted rights instead you purchase and then sell You directly hand over the rights to a third party.even then AS-13 dictates to reduce sale of proceeds of Rights from Investments 

 

I expect some bright students to clarify this please 


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