Page 121 - IC26 LIFE INSURANCE FINANCE
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ACCOUNTING STANDARDS - 13
ACCOUNTING FOR INVESTMENTS (REV. ’03)
Applicability: Mandatory for all enterprises.
Investments are classified as Long Term Investments and Short Term Investments.
Current Investment is intended to be held for not more than one year and readily realisable.
Long term Investment is an investment other than a current investment.
The carrying amount of current investments is lower of cost and fair value.
It is prudent to carry investments individually at the lower of cost and fair value. But, such
comparison can also be made category-wise.
The carrying amount of long-term investments is carried at cost. However, when there is
permanent decline in the value of a long-term investment, the carrying amount is reduced to
recognize the decline. The carrying amount of long-term investments should be determined on
individual basis.
Any reduction or reversal of reduction in value of investment is adjusted through P&L A/c.
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