jitesh (3rd year Article) (59 Points)
11 August 2011Dear Friends One of my client is dealing in silver. ...........As the silver prices is increased gradually so due to this effect his profit has increased just due to accounting effect............. Accounting profit increased just due to increased in value of closing stock Can anyone help me how to tackle with this situation
regards jitesh
varun maingi
(ca final)
(72 Points)
Replied 13 August 2011
notional profits are not accounted when he will sell it then it will be booked as per the principle of conservatism principle
CA Saiyum khan
(Practicing CA)
(690 Points)
Replied 15 August 2011
Inventory has to be accounted as per cost or net realisation value whichever is lower.
CAclubindia
