Treatment in Investment(shares) Accounting

This query is : Resolved

CA Trinath Galla (Querist)
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01 February 2009 If, when rights to purchase the shares are issued to existing share holders,
what should be the treatment if,
rights are sold to any other person---whether to be treated as income directly and credited to profit&loss a/c (or) to be credited to the cost of investments already existing..........????

CA RAMESH KUMAR AHUJA

CA RAMESH KUMAR AHUJA (Expert)
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02 February 2009 The sale proceeds are to be adjusted against the cost of this right entitlement which is the difference of cum-right price and the ex-right price. The surplus is the capital gain and any deficit will be the capital loss.