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BRILLIANT’S Investment Accounting 265

The resultant reduction in the carrying H¡$[a¨J A‘mC§Q> ‘| CËnÝZ H$‘r {S>{‘ݶyeZ H$m àmdYmZ
amount is charged to profit and loss account H$aHo$ bm^ VWm hm{Z ImVo ‘| bJm¶r OmVr h¡&
by creating a provision for diminution.
Note: An investment property is held for ZmoQ>… EH$ B§doñQ>‘|Q> àm°nQ>u ì¶dgm¶ ¶m Cn¶moJ Ho$
rental income, other than the occupation or use, A{V[a³V {H$am¶o H$s Am¶ Ho$ {bE aIr OmVr h¡, Bgo
it is treated as a non-current investment. Zm°Z-H$a§Q> B§doñQ>‘|Q> ‘mZm OmVm h¡&
An enterprise should disclose current in- EH$ à{Vð>mZ H$mo BgHo$ ’$m¶Z|{e¶b ñQ>oQ>‘|Q²>g ‘|
vestments and non-current investments dif- H$a§Q> B§doñQ>‘|Q> VWm Zm°Z-H$a§Q> B§doñQ>‘|Q>²g H$mo {^ÝZ ê$n
ferently in its financial statements. Current in-
‘| Xem©Zm Mm{hE& H$a§Q> B§doñQ>‘|Q>²g H$mo H$a§Q> AgoQ²>g VWm
vestments are shown under current assets, and
non-current investments are shown under Zm°Z-H$a§Q> B§doñQ>‘|Q>²g H$mo Zm°Z-H$a§Q> AgoQ²>g Ho$ ZrMo
non-current assets. Xem©¶m OmVm h¡&
Types of Investments B§doñQ>‘|Q²>g Ho$ àH$ma
1. Fixed Investment or Fixed Income Bear- 1. {’$³ñS> B§doñQ>‘|Q> ¶m {’$³ñS> B§H$‘: ~r¶[a¨J
ing Securities: This type of security carries a {g³¶mo[aQ>rO… {g³¶mo[aQ>r Ho$ Bg àH$ma ‘| Am¶ (ã¶mO/
fixed rate of income (interest/dividend) and {S>{dS>|S>) H$s EH$ {’$³ñS> aoQ> hmoVr h¡ VWm dh Am¶
accures regularly and becomes due on some
specific due date (say, 30th June and 31st De- {Z¶{‘V ê$n go ~‹T>Vr h¡ {H$ÝVw, {H$gr {deof {ZpíMV
{XZm§H$ na (‘mZm 30 OyZ VWm 31 {Xgå~a) H$mo {ZpíMV
cember). Investment in government securities,
debentures and bonds come under this cat- hmo OmVr h¡& JdZ©‘|Q> {g³¶mo[aQ>rO ‘| {Zdoe {S>~|Mg© VWm
egory. ~m§S²>g> Bg loUr ‘| AmVo h¢&
For example, If a company buys 12% de- CXmhaU Ho$ {bE, ¶{X EH$ H§$nZr X {b{‘Q>oS> Ho$
benture of X ltd. for ` 1,00,000 at par and the 12% {S>~|Mg© < 1,00,000 EQ> nma ‘| IarXVr h¡
due date of payment of interest is 30 June and VWm ã¶mO Ho$ ^wJVmZ H$s S²>¶y S>oQ> 30 OyZ VWm 31
31 December, the company is entitled to get {Xg§~a h¡, H§$nZr H$mo EH$ df© Ho$ {bE ã¶mO < 12000
` 12,000 (12% of ` 1,00,000) interest for one year (< 1,00,000 H$m 12%) àmßV H$aZo H$m A{YH$ma h¡
(12% signifies rate of interest per annum on the
face value) ` 6,000 will be due on 30 June and & ’o$g d¡ë¶y na n«{V df© ã¶mO H$r (12% {g{½Z’$mBg
the balance of ` 6,000 on 31 December. aoQ>)- <> 6,000 30 OyZ H$mo S²>¶y hmo Om¶oJm VWm eof
< 6,000 31 {Xgå~a H$mo&
2. Floating Investment or Variable Income 2. âbmoqQ>J B§doñQ>‘|Q> ¶m do[aE~b B§H$‘ ~r¶[a¨J
Bearing Securities: The example of a variable {g³¶mo[aQ>rO… EH$ do[aE~b B§H$‘ ~r¶[a¨J {g³¶mo[aQ>r H$m
income bearing security is the equity share of a
CXmhaU EH$ H§$nZr H$m B{³dQ>r eo¶a h¡ EH$ AH$mC§qQ>J
company, the income for an accounting period
depends on the rate of dividend declared by nr[a¶S> Ho$ {bE Am¶ Cg H§$nZr Ûmam Kmo{fV {S>{dS>|S> H$s
that company. Xa na {Z^©a H$aVr h¡&
A business can buy or sell securities freely EH$ {~OZog ~«moH$a Ûmam ñQ>m°H$ E³gM|O ‘| ñdV§Ì ê$n
in the stock exchange through brokers, who go {g³¶mo[aQ>rO IarX ¶m ~oM gH$Vm h¡ Omo CZH$s g{d©gog
charge a small commission for their services Ho$ {bE EH$ N>moQ>m H$‘reZ bJmVm h¡ {Ogo ~«moH$aoO H$hm
known as brokerage. Services can also be pur- OmVm h¡& g{d©gog H$m ~«moH$g© Ho$ ñWmZ na ~¢³g Ûmam ^r