Capital profit treatment

It is called CAPITAL GAIN........... BE LONG TERM OR SHORT TERM..

AS 13 deals with accounting for investments made by an enterprise in another enterprise and the disclosure of such investments in the financial statements. An enterprise holds investments for a variety of reasons. Such investments form a significant aspect of the operations of an enterprise in certain cases. Therefore, the evaluation of the performance of such an enterprise depends upon the return earned through such investments.

Hence the gain is transffered to P&L acct., while (any) loss is debited to cost of investment.

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