TaxTMI 
TaxTMI 
Accounting policies and standards
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....ments, mutual funds shall mark all investments to market and carry investments in the balance sheet at market value. The realised gains or losses on sale or redemption of investment, as well as unrealised appreciation or depreciation shall be recognised in all financial statements through Revenue Accounts. However, since the unrealised gain arising out of appreciation on investments cannot be dist....
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....d from the last interest due date upto the date of sale must not be treated as an addition to sale value but must be credited to Interest Recoverable Account. (d) In determining the holding cost of investments and the gains or loss on sale of investments, the "weighted average cost" method must be followed. (e) Transactions for purchase or sale of investments should be recognised as of the t....
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....ent accrues are traded on the stock exchange on an ex-bonus basis. Similarly, rights entitlements should be recognised only when the original shares on which the right entitlement accrues are traded on the stock exchange on an ex-rights basis. (g) Where income receivable on investments has accrued but has not been received or in case of debt securities classified as below investment grade, prov....
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....ceeds should be credited to an Equalisation Account and when units are repurchased an appropriate amount should be debited to Equalisation Account. The net balance on this account should be credited or debited to the Revenue Account. The balance on the Equalisation Account debited or credited to the Revenue Account should not decrease or increase the net income of the fund but is only an adjustmen....