Page 269 - Corporate Finance PDF Final new link

BRILLIANT’S Investment Accounting 269

4. For transfer of interest/dividend to the Profit and Loss
Account/Statement of Profit and Loss at the year end
df© H$s g‘m{ßV na ã¶mO/{S>{dS>|S> H$m bm^ VWm hm{Z ImVo/bm^
VWm hm{Z Ho$ ñQ>oQ>‘|Q> H$mo ñWmZm§V[aV H$aZo Ho$ {bE&
Interest/Dividend Account Dr.
To Profit and Loss Account/Statement of Profit and Loss
5. At the end of the accounting year, the balance of invest-
ment is to be valued as follows:
AH$mC§qQ>J df© H$s g‘m{ßV na {Zdoe H$m ~¡b|g {ZåZ àH$ma go ‘yë¶
bJm¶m OmVm h¡…

(a) Current investments at cost or fair value, whichever is
lower.
bmJV ¶m ’o$¶a d¡ë¶y na H$a§Q> B§doñQ>‘|Q> Omo ^r H$‘ h¢;

(b) Long-term investment at cost (provided no decline is
anticipated). NPP
bmJV na XrKm©d{Y {Zdoe ({Z{X©ï> h¡ {H$ {H$gr ^r {JamdQ> H$m AZw‘mZ
Zht bJm¶m J¶m h¡);

(c) Investment properties at cost.
bmJV na B§doñQ>‘|Q> àm°nQ>uO&

6. The balance of investment account represents the profit
or loss on sale of investment. If it shows a credit bal-
ance, there is a profit. The entry will be:
B§doñQ>‘|Q> AH$mC§Q> H$m eof B§doñQ>‘|Q> Ho$ {dH«$¶ na bm^ ¶m hm{Z H$mo
àX{e©V H$aVm h¡, ¶{X ¶h EH$ H«o${S>Q> ~¡b|g Xem©Vm h¡ Vmo bm^ h¡&
E§Q´>r hmoJr…

Investment Account Dr.
To Profit and Loss Account/Statement of Profit and Loss
If this account shows a debit balance, there is a loss.
The entry will be:
¶{X AH$mC§Q> EH$ S>o{~Q> ~¡b|g Xem©Vm h¡ Vmo hm{Z h¡& E§Q´>r hmoJr…
Profit and Loss A/c/Statement of Profit and Loss Dr.
To Investment Account

It should be noted that interest/dividend is calculated on nominal/face value of the invest-
ment. / ¶h XoIm OmZm Mm{hE {H$ ã¶mO/{S>{dS>|S> H$s JUZm Zm°{‘Zb/’o$g d¡ë¶y na H$s OmVr h¡&