share trading
Suresh Pai S (Tax Consultant) (1029 Points)
14 April 2017
What is the relevant accounting standard to refer to investments made by a share trading firm?
3 Replies
Suresh Pai S
(Tax Consultant)
(1029 Points)
Replied 15 April 2017
AS 2 should be applied in accounting for inventories other than:
(a) work in progress arising under construction contracts, including directly related
service contracts (see Accounting Standard (AS) 7, Construction Contracts);
(b) work in progress arising in the ordinary course of business of service providers;
(c) shares, debentures and other financial instruments held as stock-in-trade; and
(d) producers’ inventories of livestock, agricultural and forest products, and mineral oils,
ores and gases to the extent that they are measured at net realisable value in
accordance with well established practices in those industries.
(a) work in progress arising under construction contracts, including directly related
service contracts (see Accounting Standard (AS) 7, Construction Contracts);
(b) work in progress arising in the ordinary course of business of service providers;
(c) shares, debentures and other financial instruments held as stock-in-trade; and
(d) producers’ inventories of livestock, agricultural and forest products, and mineral oils,
ores and gases to the extent that they are measured at net realisable value in
accordance with well established practices in those industries.
CA. Sunil Gokhale
(Teacher)
(1484 Points)
Replied 13 May 2017
No AS for share trading. But that does not mean you cannot use AS 2. Closing stock should be valued at lower of cost or NRV.
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