Manish Arya Bhai,

I Had given this entry

which is as per AS 30...............

1)in case of appreciation in the Value of the investments

Investments A/C -------dr.       (increment)

   To Revenue  A/c                   (increment)

2)In case of loss in the value of the investments

Revenue A/C----------dr. (Decrement)

    To Investment A/c                   (Decrement)

3) Incase of sale of the investment

Bank A/c........................ Dr.       (Sale value)

Revenue A/c................................Dr.         (Loss if any )

    To Invetment A/c      (Cost of investment)

   To Revenue A/c         ( Profit if any )

Now Please anyone confirm which would be followed............???

Here, I am uploading the Revised solutions of illustrations of Mutual funds

Attached File : 27_ca_final__mutual_funds_as_per_as_30.pdf

The entry suggested by @ Manish Bhai is As per Study mat (as per

"Guidence Notes on Accounting for Mutual Funds".)

Now i am confused that Why ICAI institute had not amended its Material as per AS 30

Plz. Clarify..........if possible............

Originally posted by : CA Mihir Shah
	@ suresh  do tou mean to say that asset management company needs to follow guidance note on mutual funds??

No Mihir Bhai i wana tell you that in the study mat it is clearly said as follw...........

PAGE NO 8.12 of VOL-II of Financial Reporting ............

1.9 MARKING INVESTMENTS TO MARKET
For the purposes of the financial statements, mutual funds shall mark all investments to market and carry investments in the balance sheet at market value. However, since the unrealized gain arising out of appreciation on investments cannot be distributed, provision has to be made for exclusion of this item when arriving at distributable income. Clause 2(i) of Eleventh Schedule of the regulations provides that in carrying investments at market values, the asset management companies should follow the Guidance Note issued by the Institute of Chartered Accountants of India. As per paragraph 10 of the Guidance Note on Accounting for Investments in the Financial Statements of Mutual Funds, issued by the Institute of Chartered Accountants of India, while marking investments to market on balance sheet date, the excess of cost of acquisition over market value of securities on valuation day is treated as depreciation (unrealized loss). Likewise, the excess of market value of securities on valuation day over cost of acquisition is treated as appreciation, which is unrealized gain. The provision for depreciation in the value of investments is created in the books by debiting the Revenue Account. The provision so created is shown as a deduction from the value of investments in the balance sheet. However, unrealised appreciations are directly transferred to the Unrealised Appreciation Reserve, (i.e., without routing it through the Revenue Account) with the corresponding debit to the Investments Account. The Guidance Note recommends reversal of the Unrealised Appreciation Reserve at the beginning of the next accounting year.

Now i am asking to clarify that whether we should follow AS 30 or Guidance Note for May 2011 Final Exam....

Yes Suresh Bro you are right ..........

In study mat entry is as per the Guidence Notes.... which is suggested by ( taught by Parveen Sharma Sir.) @ Manish Bhai........

And you provided the entry as per AS 30 (taught by  Sudarshan Agrawal  Klkata)

Now i suggest for the AS 30 as  Suresh Bhai ( Sudarsan Sir Notes )the guidance note is withdrawn

But You Should better to give a Note for that. in Exam

Best of Luck for May 2011

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