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How to calculate cost of shares of unlisted private company

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pooja Kotak

34 Points Posted on 08 June 2023

Hello

A unlisted private company allotted shares to a director at the time of incorporation 100 shares @ 10.

Further the said director purchased shares from other director 200 shares @ 500.

now he is selling 150 shares @ 700

in this case what will be cost of acquisition ??

500 or 10 ???

Replies (2)

Quick Summary

This discussion clarifies how to calculate the cost of shares in an unlisted private company. When a director acquired shares at different prices and is now selling some, the First-In, First-Out (FIFO) method should be applied. This means the cost of the earliest acquired shares is used first when calculating the cost of acquisition for the shares being sold.

rama krishnan

12244 Points Posted on 08 June 2023

Cost for shares have to be taken on FIFO that is first in first out. in your case out of 150 shares, cost of 100 shares have to be taken as 10 and the cost of balance 50 shares have to be taken as 500