MUTUAL FUND AUDIT

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utsav (Querist)
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04 April 2008 I WANT THE LEARN THE BASISC OF INCOME EQUALISATION RESERVE & UNIT PREMIUM RESERVE
HOW & WHEN THESE A/C ARE AFFECTED

Abhinav Khemani

Abhinav Khemani (Expert)
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04 April 2008 Hi Utasav,

IER and UPR are two of the three components of the NAV, Third one is Unit Capital (UC) i.e. face value of the Unit.

IER represents the per unit realised profits on investments by mutual fund.

UPR represents the per unit unrealised profits on investments by mutual Fund.

These accounts are affected on every purchase and redemption of units

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For purchase of units (Sale by Mutual Fund) at NAV of say Rs. 30 following Entry will be passed:

Bank A/C Dr. 30
UC Cr. 10
IER Cr. 05 (assumed)
UPR Cr. 15 (Assumed)

For Every Redemption of Units (Purchase by Mutual Funds)

UC Dr.
IER Dr.
UPR Dr.
Bank Cr.

utsav

utsav (Querist)
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05 April 2008 if the nav is below the face value then whether both ier & upr is affected or only one of them
is there any possibility that ier or upr has dr bal at any time

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R.V.RAO

R.V.RAO (Expert)
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05 April 2008 AMFI WEBSITE CAN ALSO THROW SOME USEFUL LIGHT IN THIS REGARD.
R.V.RAO

Abhinav Khemani

Abhinav Khemani (Expert)
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11 April 2008 Logically, it is possible to have debit balance as if Realised and unrealised profits are accounted, we must account the Realised and unrealided Losses also.

Abhinav.