Valuation of C/Stock-(Shares)

AS 711 views 2 replies

Ankit

C.A.-Student

680 Points Joined March 2007

An individual (proprietor) deals in stock market almost daily & do intraday & also some delivery based trading of shares.

For income tax purpose, gains from these transaction are computed under the head business/profession (Is this approach is correct?) & that why proper book of a/c are also required to be maintained & audit to be done (in some cases) & also stock (Quantitative detail)to be maintained.

Now from accounting point of view how to calculate the value of shares as stock because AS-2 is not applicable in these cases. Please provide the method of valuation in case of shares Is AS-30,31,32 related with these issue?

Please Help In this regard

Thanks

Replies (2)

Deepesh Jain

C.A (May 11 Batch)

104 Points Joined November 2008

Why as 2 not applicable? It is applicable

Ankit

C.A.-Student

680 Points Joined March 2007

Bro

AS-2 is NOT applicable in case of shares as stock in trade

as per para 1(c) under Scope of AS, which is read as under,

Scope
1. This Statement should be applied in accounting for inventories other
than:

(a) work in progress arising under construction contracts,
including directly related service contracts (see Accounting
Standard (AS) 7, Accounting for Construction Contracts);

(b) work in progress arising in the ordinary course of business of
service providers;

(d) producers’ inventories of livestock, agricultural and forest
products, and mineral oils, ores and gases to the extent that
they are measured at net realisable value in accordance with
well established practices in those industries.

So, anyone could tell me method of valuation of shares as held as Stock-in-Trade

Thanks