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Can any one explain treatment of 3400in below attachment
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Normally entire amount would have been credited to p and l account and the journal entry would have been Bank a/c DR 4000 To. P and l A/c. 4000 But in this case since the market value of shares of their becoming ex right fallen by 3400,so the sale proceed of rights should be applied to reduce the carrying amount of investment to market value Journal entry Bank a/c Dr. 4000 To investment a/c 3400 To Pand l a/c. 600
In case of Investment acquired on cum right basis and the market value of those shares immediately after their becoming ex right is lower than at which they were acquired ,then the sale proceed of the rights shall be applied to reduce the carrying amount of the investment
Abhishek Purohit
In case of Investment acquired on cum right basis and the market value of those shares immediately after their becoming ex right is lower than at which they were acquired ,then the sale proceed of the rights shall be applied to reduce the carrying amount of the investment
Why they used bank account Bro IAM confused.Can you explain Why they are linking shares to right issue
Thread Starter
Sairam ReddyWhy they used bank account Bro IAM confused.Can you explain Why they are linking shares to right issue
It is the requirement of standard See para 13 of AS 16
Abhishek Purohit
It is the requirement of standard See para 13 of AS 16
Thanks bro I just read that in case of income from sale of rights to be transferred to p&l account But forgotten to read exceptions to this rule.