A Company is engaged in real estate business and also trading in shares. Amount invested in securities other than shares are being shown as investments.
The company also invests in PMS and the amount invested by it is bifurcated into shares and other investments i.e. shares transactions are shown as our trading activities and transactions in other securities are shown as investments in our books
Please advise whether it is correct.
We are valuing our closing stocks(shares) at cost or market price whichever is less.
Please advise whether it is correct.
Real estate and trading firm seeks guidance on classifying and valuing investments under consistent policy; intention at transaction crucial. A company involved in real estate and share trading is inquiring about the proper classification and valuation of its investments. It separates its investments into shares for trading and other securities as investments. The company values its closing stock of shares at either cost or market price, whichever is lower. A respondent advises that the classification depends on the intention at the time of transaction, allowing for two portfolios. Inventory should be valued based on a consistently applied policy by the assessee. (AI Summary)
TaxTMI 
TaxTMI 
