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Change of PATTERN OF ASSESSMENT FROM MAY 2019 EXAMINATION

ICAI has already notified that from May 2019 examinations, pattern of assessment is going to be changed, as of till now, whole pattern was...

Friday, 22 January 2016

AS 13 & IndAS 109

🙏💪🏼💪🏼🇮🇳 AS💪🏼💪🏼🙏

📦Recognition of Investment Income .

👉It is very common for companies to have a significant treasury income given the strong cashflows over time.  

👉As per AS 13, investments are classified as long term or current.

▶Current investments are intended to be held for not more than 1 year from the date of investment, and long term investments are those that are not current. 

▶Investments are carried in the books at cost under normal circumstances unless there is a diminution in value of a long term investment or the fair value of a current investment is lower than the cost.

▶As a result, appreciation in value of say an investment in a growth mutual fund or a fixed maturity plan is not recognised overtime.

▶Instead there is a lumpy recognition of income from such investments on maturity. 

👉There will be a significant change under Ind AS 109 going forward.

▶Investments will need to be      recognised at either fair value or amortised cost.

▶In either of the circumstances, income would accrue over time on such investment either in the P&L or Other Comprehensive Income (OCI) of the       company.  

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