what will be the accounting treatment for profit from sale of investment (shares) ?
will it considered as capital profit?
It is called CAPITAL GAIN........... BE LONG TERM OR SHORT TERM..
6 Replies
sabyasachi mukherjee
(27664 Points)
Replied 11 January 2023
Yes it will be transferred to capital reserve.
Atharv Sankliya
(1356 Points)
Replied 11 January 2023
But as per AS-13 it will credited to p&l account
Dhirajlal Rambhia
(SEO Sai Gr. Hosp.)
(183358 Points)
Replied 12 January 2023
AS 13 deals with accounting for investments made by an enterprise in another enterprise and the disclosure of such investments in the financial statements. An enterprise holds investments for a variety of reasons. Such investments form a significant aspect of the operations of an enterprise in certain cases. Therefore, the evaluation of the performance of such an enterprise depends upon the return earned through such investments.
Hence the gain is transffered to P&L acct., while (any) loss is debited to cost of investment.
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