Revised schedule vi accounts

Dear friends,

 

Whether investments in Debt/Equity funds for over an year as on 31.03.2012 will be classified as Non-current Investments?

Replies (3)

For an investment, the only criteria applicable to assess whether it is a Non current or current asset, is the  criteria , "Whether it is expected to be realised within 12 months from the reporting date"

Here in your case, we must see whether the debt shall be redeemed or the equity is going to be bough back/realised within 12 months from the reporting date. The date of acquisition of the investment and the holding period is irrelevant as per the Rev Sch VI

In that case, as an auditor do we need to take a letter from the Management regarding their intention to hold the investments or redeem the same within one year for classification purposes?

Prima facie, preparation of Financial Statements are the responsibility of the Management and the responsibility of the auditor is expressing opinion thereon, so unless there is something that arouses suspicion in particular, classification is not much of a botheration to the auditor.But ofcourse as a matter of prudence and as a part of the working papers, its advisable that such a representation letter be requested.

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