Investment

Accountancy

What is the meaning of cum-right shares? Why In those shares amount of sold right not deduct from the cost of investment?

Rakesh Shah

CA Final

★ 5K+

06-Jun-22 00:08

519

Answers (1)

Market price, which exists before rights issue, is termed as Cum-right Market Price of the share. Cum-rights shares are thus, whose price include the value of right. Can you be clearer in your second part of question? In these shares, rights sold are reduced from carrying amount if market value of investments immediately after their becoming ex-right is lower than the cost for which they were acquired.

Sahibdeep Singh

CA Inter

★ 14K+

06-Jun-22 11:13