07-14-2003, 01:43 AM
thanks pervez, but my question had a little more than you answered. Let me put an example.
you acquire 10 shares, Jan 01 @ Rs. 12
10 more shares, Feb 01 @ Rs. 14
10 more shares again, March 01 @ Rs. 16
now, June 30 and you hold 30 shares cost Rs. 420 (its a coincidance, this Rs. 420 )
and at June 30 their fair value is Rs. 20 /share i.e. you carry your portfolio @ Rs. 600 that costs Rs. 420 i.e. 14 /share.
now the same date, or next, you sell 10 shares @ Rs. 20.
now how are you going to determind the cost of the 10 shares you sold???
is it 16 (following LIFO)
is it 12 (following FIFO)
or is it 14 (following average)
or are we going to determine how much profit we want to be routed to Income statement by determining the specific cost?? (it wont be practicable in CDC kept shares)
In the previous standard relating to investments, I guess they followed the LIFO method.
Me rulz
you acquire 10 shares, Jan 01 @ Rs. 12
10 more shares, Feb 01 @ Rs. 14
10 more shares again, March 01 @ Rs. 16
now, June 30 and you hold 30 shares cost Rs. 420 (its a coincidance, this Rs. 420 )
and at June 30 their fair value is Rs. 20 /share i.e. you carry your portfolio @ Rs. 600 that costs Rs. 420 i.e. 14 /share.
now the same date, or next, you sell 10 shares @ Rs. 20.
now how are you going to determind the cost of the 10 shares you sold???
is it 16 (following LIFO)
is it 12 (following FIFO)
or is it 14 (following average)
or are we going to determine how much profit we want to be routed to Income statement by determining the specific cost?? (it wont be practicable in CDC kept shares)
In the previous standard relating to investments, I guess they followed the LIFO method.
Me rulz
