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Valuation of shares

Akhilesh Poddar (Article Assisstant) (56 Points)

14 June 2013

cost of shares - 500000-current investment

Market value of such shares - 200000-current investment

What will be the treatment of such downfall in the value of shares in books of accounts and income tax

please provide a journal entry if possible

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7 Replies

CA Pooja Agarwal (Chartered Accountant) (3228 Points)
Replied 14 June 2013

As per AS 13, current investments should be recorded at cost price or Market value whichever is lower.

the difference should be reported in p/l ac.

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Rama chary Rachakonda (Master in Accounts & Lawyer email ID:ramachary64@gmail.com voice no:9989324294) (5197 Points)
Replied 14 June 2013

Originally posted by : CA Pooja Agarwal
	As per AS 13, current investments should be recorded at cost price or Market value whichever is lower. the difference should be reported in p/l ac.

Cost price only to be shown in current investments. No difference in P & L a/c. Since market value is not to be recorded in financial accounts.

Akhilesh Poddar (Article Assisstant) (56 Points)
Replied 14 June 2013

thank you

but what about income tax

CA Pooja Agarwal (Chartered Accountant) (3228 Points)
Replied 14 June 2013

Originally posted by : Rama chary

Originally posted by : CA Pooja Agarwal

As per AS 13, current investments should be recorded at cost price or Market value whichever is lower.

the difference should be reported in p/l ac.

Cost price only to be shown in current investments. No difference in P & L a/c. Since market value is not to be recorded in financial accounts.

Mr.Rama i request you to read AS 13.