Provision for value of dimunation of value of shares

I am working in the investment Company. which deals with purchased & sales of shares I want to Know on which factors provision for diminution in the value of Investment is made, On which factors it depends. Further what is the format in Excell.. Please reply soon

 

Replies (1)

Provisions standard does not comply with standards like Income taxes, Employee benefits, Leases, Insurance contracts and Financial instruments. Also, an entity cannot provide for future losses. So, diminution means the amount of authorised capital which was cancelled during an issue. There could be factors like: 

The amount of capital raised was over-budgeted and that is why the firm had cancelled a portion or complete issue to reduce/avoid costs of capital like Ke (Equity cost of capital), Kd (Debenture cost of capital), Ki (Term loan cost of capital) and Kp (Preference Share cost of capital). 

Next, the firm anticipated lower returns and since dividends are a burden, it had cancelled its issue as there is low growth. 

The above are my assumptions and there is no excel format for it as it looks like a qualitative analysis on market conditions. 

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
Featured 03 October 2026
Accountant

A P Lodha and Associates

Jalna

B.Com

View Details
Company
ARTICLESHIP 08 October 2026
ARTICLE TRAINEE

S.B.G. & CO. CHARTERED ACCOUNTANTS

New Delhi

CA Inter

View Details
Company
05 October 2026
Senior Accountant

Vision IT Peripherals Pvt Ltd

Mumbai

B.Com

View Details
Company
10 October 2026
Accounts Associate Level 1

Abic and Mani Chartered Accountants

Kottayam

B.Com

View Details
Company
19 October 2026
Accountants/Articles (Freshers/Experienced)

ADY & CO.

New Delhi

Graduate (Any)

View Details
Company
ARTICLESHIP 28 October 2026
Article assistants

Shyam S Gupta and Company

New Delhi

CA Inter

View Details
Company
14 October 2026
GST & TDS ASSISTANT

AGGARWAL SANJAY & ASSOCIATES

New Delhi

B.Com

View Details
Company
12 October 2026
AUDIT , ACCOUNTS AND TAXATION

KDSS

New Delhi

B.Com

View Details