Dear Students - CA -CWA Final
Hope friday reminds of you a weekend coming up - Those who are working - you get to have next 48 hours for only studies :) am sure you have lot of plans to cover up your backlog and get back to your plans.
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Continuing with my Post straight 4th day for Accounting Standards - today we discuss about a Question from AS 13
What is meant by Carrying amount of Investments ?
This is the valuation of Investment as at Balance Sheet Date.
How to determine whether an Investment is Current Investment or Long term ( Non -current investment as per revised Schedule VI ) ?
Current investments are those which are readily realisable - intended to be held not more than 12 months.
Non -Current investments or Long term investments are the ones which are more than 12 months.
INVESTMENT IN PROPERTY should always be classified as NOn-Current Investment ( Or Long -term investments)
What woudl be the Carrying cost of Non-Current Investment ?
Determine if there is any PERMANENT DIMUNITION in value on an Individual investment basis. If there is permanent diminution in value - charge the same to the Profit & Loss account.
How often shoudl you review this ?
At every balance sheet date and periodically review this . IF there are temporary Diminuition in value - you can ignore the same
What happens the Investment value goes above the Cost of INvestment which has been considered for Permanent Dimunition in the past years ?
If there are subsequent changes during the Balance Sheet review in the next year - the increase in Market value to teh extent not exceeding the Original Debit to teh Profit and Loss account can be debited to Investment Account.
Investments will always be shown at Cost so the carrying amount cannot exceed cost.
Regards,
Satish.
Tejas Learning Centre
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