How to treat if an investor invest in a Pvt.Ltd.Co.

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CA
2141 Points Posted on 03 September 2020

An investor invested in a start up how to do the accounting entry and  under which head?

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On 03 September 2020 at 08:15 Report
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Quick Summary
This discussion explores how to handle accounting entries when an investor invests in a Private Limited company. It highlights the importance of determining the nature of the investment, such as Fair Value Through Profit or Loss (FVTPL) or business combinations under IndAS. The entry suggested is Debit Bank Account and Credit Promoters Investment Account, with the latter being treated as 'Other Income' under Indirect Income in the Profit & Loss Account.

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My grammar is 💯 good I
7306 Points Posted on 03 September 2020

Check out what kind f investment it is. FVTPL.? Or investment interest as per business combinations in IndAS. Find out what does the investment hold in that start up eg. investment interest, associate, JV or subsidiary and treat accordingly.

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On 03 September 2020 at 09:12
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GST Practitioner & Accounts
15150 Points Posted on 04 September 2020

Investors  Investment  in  Star up  company  will be  Income  for  the  company   and if  Not  going  to  return back  . Then  accounting entry will be as follows . 

Bank                                    A/c    Dr 

Promoters Investment         A/c    Cr 

(  Being amount  received  towards  investment  ) 

Note -  Promoters Investment  A/c  will be  under  Indirect  Income ( Other Income )   under  Profit  & Loss  A/c   

This is my opinion  you may  consult  with others also .         

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On 04 September 2020 at 09:28

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