We are showing investment in shares in our Balance Sheet at cost price since 2012. We are a manufacturing concern and shares are not the part of our stock. This year, we are planning to show it at Cost or Market Price, whichever is lower. Can we do the same? If yes, then whether the reduced part of investments shall be written off from P&L or from the Partner's Capital? Please guide me on the same.
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Valuation of long term investments in balance sheet of firm
Replies (6)
Thanks for the query Rohan,
Certainly we are allowed to change policy, I believe the charge should be on P&L because investments are assets of firm derived from its property and earnings
Certainly we are allowed to change policy, I believe the charge should be on P&L because investments are assets of firm derived from its property and earnings
| Originally posted by : abhimanyu | ||
 |
Thanks for the query Rohan,Certainly we are allowed to change policy, I believe the charge should be on P&L because investments are assets of firm derived from its property and earnings |  |
Just to inform you it's a partnership concern.
*not from the partner's individual assets or earning.
Hope you have a positive idea for your query which hopefully is inline with your thinking.
Though I think w/off from capital account is possible if shares were introduced by partner as capital seeding.
But in that case too I doubt it to be reduced from capital account.
Thanks,
Abhimanyu
Hope you have a positive idea for your query which hopefully is inline with your thinking.
Though I think w/off from capital account is possible if shares were introduced by partner as capital seeding.
But in that case too I doubt it to be reduced from capital account.
Thanks,
Abhimanyu
| Originally posted by : abhimanyu | ||
|
*not from the partner's individual assets or earning.Hope you have a positive idea for your query which hopefully is inline with your thinking.Though I think w/off from capital account is possible if shares were introduced by partner as capital seeding.But in that case too I doubt it to be reduced from capital account.Thanks,Abhimanyu | |
I hope the answer is it will be shown only on Cost Price always for partnership firm who is not engaged in business of shares trading. Since, firm has invested with a long term view and does not intend to sale them in near future, valuation will be done on cost only. The day it sells them, the realised profit or loss will be credited or debited to P&L account of Firm. I hope this is the answer.
Thanks for reverting,
If the intention is not to make investments available for sale they should be stated at cost but if company intends to make such shares available for sale it can value at cost or fmv lower.
Its basically our wish.
But if charged should be deducted from P&L.
Thanks
If the intention is not to make investments available for sale they should be stated at cost but if company intends to make such shares available for sale it can value at cost or fmv lower.
Its basically our wish.
But if charged should be deducted from P&L.
Thanks
*by company i mean firm*
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