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AS - 13



Accounting for investments in the financial statements of enterprises and related disclosure requirements.


It deals with investments in the financial statements of enterprises.

It excludes and does not deal with

a.     Operating or Finance Leases.

b.     Investments of Retirement Benefit Plans and Life Insurance Enterprises.

c.      Mutual funds and venture capital funds.




Investments are assets held by an enterprise for earning income by way of dividends, interest, and rentals, for capital appreciation, or for other benefits to the investing enterprise. Assets held as stock-in-trade are not ‘investments’.

Two types of investment are as follows:

1.     Long term investments:

(Each investment individually)

2.     Current investments:

(These are of either on an individual investment basis or by category of investment, but not on an overall basis.)

Cost of investments:

1. Basic cost

2. Acquisition charges.

Income from investments:


Interest, dividend and rentals receivable in respect of such investments are treated as income except where such interest or dividend relates to pre-acquisition period, in which case, such interest or dividend received is reduced from the acquisition cost.

Recognition and measurement principles:

Current investments: At lower of cost or market price

Long term investments: At cost

Incase of disposal of investments:

When any investments are sold, the difference between the carrying amount and net sale proceeds should be charged or credited to the profit and loss statement.

In case of partial disposal, the carrying amount to be allocated to that part is to be determined on the basis of the average carrying amount of the total holding of the investment. 

Disclosure requirements:

The following should be disclosed:

1.     Investments should be classified first.

2.     The accounting policies followed for determining carrying amounts should be disclosed.

3.     The amounts included in profit and loss statement for interest, dividends, rentals, profits and losses on disposal of investments.

4.     The aggregate amount of quoted and unquoted investments

5.     Significant restriction on the right of ownership or the remittance of income and proceeds of disposal should be disclosed.

6.     Any other disclosures specifically required by statute.




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