HELP.................

U]@$H $H@H (C.A.-Final) (267 Points)

01 May 2011

i am not understand FIFO and AVEREGE METHOD in investment accounting AS-13 (ipcc) .....plzzzzzzz make my concept clear.......

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CA Amit Kumar Khaitan (Research Analyst) (360 Points)
Replied 01 May 2011

Lets take an example:

Bought TiSCO shares 1/4/11- 500 shares at Rs.20 each

on 5/4/11- another 400 at Rs. 40 each.

FIFO-

Sold 600 shares on 11/4/11 at 33 each.

Profil/Loss- [500*(33-20)+100*(33-40)] = INR 5800

Closing BS value of shares- 300*40 = INR 12000

Weighted Average-

Same condition

P/L- [600*(33-x)]

closing balance - x*300

Here x= weighted average price

= [500*20+400*40]/(500+400)

=26000/900

= INR 28.89.

Hope I understood your query.

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