Investment in section 8 company
Atharv Sankliya (1356 Points)
10 February 2023
does investment in shares of section 8 company is recorded as investment in balance of the company (investor)
2 Replies
Aarika
(Finance Professional)
(2360 Points)
Replied 13 February 2023
Investment in shares of a Section 8 company is recorded as an investment in the balance sheet of the company that made the investment (the investor). The balance sheet is a financial statement that provides a snapshot of a company's financial position at a specific point in time. It shows the company's assets, liabilities, and equity, including investments in shares of other companies.
When the investor buys shares of a Section 8 company, the investment is recorded as a long-term investment in the balance sheet. The investment is initially recorded at its cost, and then the carrying value may be adjusted over time to reflect any changes in the market value of the shares. The value of the investment is reported in the balance sheet until it is sold, at which point the proceeds from the sale are recognized as a gain or loss in the company's income statement.
Atharv Sankliya
(1356 Points)
Replied 13 February 2023
But why it is recorded as investment although there will be no benefit recived by the investor like dividend, interest and capital appreciation??
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