Revised schedule doubt

1365 views 11 replies

Please solve the following query in Revised Schedule VI:
Under category of Current Liabilities and Current Assets
 

"It is held primarily for the purpose of being traded'
 

What is the meaning of this line?

Replies (11)

I think it means stock in trade

what about its meaning under current liabilities????????

"It is held primarily for the purpose of being traded'  



its all about(current liabilities)  transactions are related purily with business nd whch r expressed in monetary terms::::nd used for day to day operations i.e. nthg but with in a period of one year dude...

Thanks but could not relate the meaning ...Please reply comprehensively

 

 "It is held primarily for the purpose of being traded"

This line is required to be understood in context of financial instruments say options & futures , so these financial instruments which are primarily held for the purpose of being traded are covered under the head Current Assets & Current Liabilities.

 

in simple language: those assets/liabilities which could be sale. for exmpl debtors can be sold under factoring..

I have unerstood its meaning under current assets?

What about current liabilities?

Why the word "Traded" being used here?

 

"It is held primarily for the purpose of being traded' 

This is one of the condition , to classify current or non current. This condition is only applicable to assets . ( Relevant for Inventories , as inventories always current asset  as per ICAI FAQ)

 

 

In case of Current Liabilities it is in the context of Financial Instruments like...options, futures etc.

I think that this phrase, in context of Current assets represents Debtors and stock in trade..

and wrt current liabilities, it represents creditors...

It relates to purchases and sales of the company..

It may not be necessarily in the physical form..

This is my opinion and please let me know if any thing is wrong.

'held for the purpose of trading' under the heading 'current liabilities' means financial instruments like future & options .

                These instruments are held for the purpose of trading by short term investors .

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