What should be the basis of valuation of Investment made by a company in mutual funds? NAV or Cost Price? please explain the basis of your answer with suitable reasons..
2 Replies
CA Sachin Rastogi
(Audit/IFRS Manager)
(338 Points)
Replied 23 October 2011
As per IFRS- investment in mutual funds is a financial asset. The recognition, measurement and presentation of a financial asset is based on its classification either as held to maturity, fair value through profit or loss, loans and receivables and availab for sale financial assets.
The above classification depends on the management judgement. So please clarify what is the management intention to hold these investments then we can discuss its initial recognition and subsequent measurement.
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