Valuation of Shares
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
13 January 2011
Dear Friends,
What is the method of valuation of shares in Public Limited Company ? This Company is Manufacturing Company and has Investment in shares. As per it's Portfolio Management Report it is taken on First in First Out method for valuation of shares whereas Auditor claims that it should be Weighted Average Cost method.
What is the method of valuation of shares in Public Limited Company ? This Company is Manufacturing Company and has Investment in shares. As per it's Portfolio Management Report it is taken on First in First Out method for valuation of shares whereas Auditor claims that it should be Weighted Average Cost method.
25 January 2011
The Answer to this question depends on the purpose of valuation of shares.
If the purpose is to carry out an audit, wherein the IAS say that investments should be valued at historical costs, then only the investment amount should be taken into consideration. Also, when you are selling the shares and computing gains, it is always the FIFO method for calculation of gains.
However, if you are carrying out an equity research valuation of the company, then the shares need to be valued at market price and thus a weighted average would present a better picture.
Hope that answered your concern.
If the purpose is to carry out an audit, wherein the IAS say that investments should be valued at historical costs, then only the investment amount should be taken into consideration. Also, when you are selling the shares and computing gains, it is always the FIFO method for calculation of gains.
However, if you are carrying out an equity research valuation of the company, then the shares need to be valued at market price and thus a weighted average would present a better picture.
Hope that answered your concern.
Message likes :
1 times
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Is this income indian or foreign income?
- GST on export of services and Input Credit
- RCM applicability on Rent Paid by Registered Person to Unregistered Landlord for Residental Building
- ITC temporary reversal and reclaim
- Applicable TDS rate for sale of property in Nov 2024
- Inventory of finished goods
- Tds on building rent monthly
- GST ON EXPORT COMMISSION
- Can we claim ITC of Feb-2024 in the month of November-2024 which was not claimed by oversight
- REGARDING 25 AS DATE OF PAYMENT AND DATE OF BOOKING
- Sale of property furniture sale
- Confusion around Form 26QB fields
- Adjustment entry in the case of Individual and HUF on 31st March
- Stock difference tax applicable on composite rate or normal rate
- LAST YEAR 2022-23 ITC IN NEXT YEAR 2023-24 REPORITNG IN GSTR-9
- MIS MATCH OF INVOICE NUMBER
- IGST Credit-Show cause notice issued-confusion
- Issue of gst e invoice
- How to adjusted advances given or receipt
- Foreign vendor without PAN unable to to register due to non receipt of OTP on foreign number ?
Trending Online Classes
CAclubindia
