03 August 2011
Sorry experts I do not agree with you. Investment on assets side will increase the asset side what will happen to the liability side there will be difference to the extent of investment.
The correct way is to capitalise the investment by crediting to the capital account and debiting it to the investment in assets side. The interest part comes latter which can be shown on credit side of P & L a/c if it is received. If not then again P & L a/c to be credited and Investment to be debited.
Mind it if the assessing officer asks for the explanation than be prepared to either get you accounts re-opened for that year otherwise you might be taxed ion the investment for the year. If your investment is more than 10 years then you need not worry.
CAclubindia
