AS - 2

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Querist : Anonymous (Querist)

06 May 2010 Can v apply AS 2 for Valuation of Shares held as Inventory ?

Aditya Maheshwari

Aditya Maheshwari (Expert)
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06 May 2010 AS - 2
This Standard should be applied in accounting for inventories other than:

1. work in progress arising under construction contracts, including directly related service contracts [see Accounting Standard (AS) 7, Construction Contracts];

2. work in progress arising in the ordinary course of business of service providers;

3. shares, debentures and other financial instruments held as stock-in-trade

Though it is not applicable in practical life all valuations are done as per method suggested in AS - 2.

CA. BIJENDER KR. BANSAL

CA. BIJENDER KR. BANSAL (Expert)
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06 May 2010 For valuation of share As-13 is applied.

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Aditya Maheshwari

Aditya Maheshwari (Expert)
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06 May 2010 Dear Bansal
Shares, debentures and other securities held as stock-in-trade (i.e., for sale in the ordinary course of business) are not 'investments' as defined in this Standard. However, the manner in which they are accounted for and disclosed in the financial statements is quite similar to that applicable in respect of current investments. Accordingly, the provisions of this Standard, to the extent that they relate to current investments, are also applicable to shares, debentures and other securities held as stock-in-trade, with suitable modifications as specified in this Standard which is equivalent to method specified AS-2.

CA. BIJENDER KR. BANSAL

CA. BIJENDER KR. BANSAL (Expert)
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06 May 2010 THANKS SIR