accounting for MF investment

This query is : Open

Querist : Anonymous

Querist : Anonymous (Querist)

25 June 2010 How to account for the purchase and sales / redemption of mutual funds units.

Further while calculating net profit, do we have account in FIFO basis or average method.

CA Kamal Gangaramani

CA Kamal Gangaramani (Expert)
Follow

01 July 2010 debit mutual fund account on purchase
Credit mutal fund account on sale

if there is profit on redemption/ sale credit profit to profit on sale of mutual fund accoutn
if there loss debit the amount to the account

CA Kamal Gangaramani

CA Kamal Gangaramani (Expert)
Follow

01 July 2010 follow fifo method for calcuating profit, required under income tax.

If you donot want to acount for income tax you have the choice as per your bussienss policy

Upgrade to CAclubindia Pro. Subscribe Now!

Querist : Anonymous

Querist : Anonymous (Querist)

01 July 2010 Thanks.

Referring to AS13 - Clause 22, which states that the profit to be recognised based on the average basis.

That means, we cannot follow the FIFO basis for company.

Is it true ?