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Accountants who are bankers, please help
08-10-2010, 03:17 PM,
#1
Accountants who are bankers, please help
We classify investments as Held for trading, held to maturity and AFS. Fine, what exactly is the difference between trading and sale? aren't they the same words? doesn't trading mean selling or purchasing a security? so what's the point of having two categories for same purpose?

AFS and HFT are provided for any permanent diminution from P&L right? so wot is permanent diminution? and how is it different from surplus or deficit? when there is surplus/deficit, we charge P&L for an equivalent amount. Please show the accounting treatment of this.

usually wot type of securities are kept under each category? And which category bankers would most prefer and why?

thanks
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08-14-2010, 06:36 PM,
#2
 
Held for trading term used for those investments, which management concern to trade in stock exchange while held for sale term used for those shares which management intention to hold for a period.

<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica, san" id="quote">quote<hr height="1" noshade id="quote"><i>Originally posted by Ejaz</i>
<br />We classify investemetns as Held for trading, held to maturity and AFS. Fine, what exactly is the difference between trading and sale? aren't they the same words? doesn't trading mean selling or purchasing a security? so what's the point of having two categories for same purpose?

AFS and HFT are provided for any permanent diminution from P&L right? so wot is permanent dimunition? and how is it different from suplus or deficit? when there is surplus/deficit, we charge P&L for an equivalent amount. Please show the accounting treatment of this.

usually wot type of securities are kept under each category? And which category bankers would most prefer and why?

thanks

<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">
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08-17-2010, 04:26 PM,
#3
 
<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica, san" id="quote">quote<hr height="1" noshade id="quote"><i>Originally posted by wmahmood</i>
<br />Held for trading term used for those investments, which management concern to trade in stock exchange while held for sale term used for those shares which management intention to hold for a period.

<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica, san" id="quote">quote<hr height="1" noshade id="quote"><i>Originally posted by Ejaz</i>
<br />We classify investemetns as Held for trading, held to maturity and AFS. Fine, what exactly is the difference between trading and sale? aren't they the same words? doesn't trading mean selling or purchasing a security? so what's the point of having two categories for same purpose?

AFS and HFT are provided for any permanent diminution from P&L right? so wot is permanent dimunition? and how is it different from suplus or deficit? when there is surplus/deficit, we charge P&L for an equivalent amount. Please show the accounting treatment of this.

usually wot type of securities are kept under each category? And which category bankers would most prefer and why?

thanks

<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">well thank you, but that doesn't help much[(]
<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">
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08-17-2010, 07:54 PM,
#4
 
Dear,

Held for trading investments are the investments which are purchased with an intension to receive short term gains due to price fluctuation in daily market. In case of a bank specifically SBP stipulates that HFT investments should be sold within 90 days of its purchase as it was our intention to trade. While AFS investments are purchases with an intension to build a long term asset for the bank obviously more than 90 days, in case of HFT gain loss charged to P& L while in case of AFS routed through reserves.

Permanent diminuation was a term used by SECP and SBP in days of crises of stock exchanges in 2008 , beacuse market was not showing its actual worth in those days so banks and other FI were advise to judge the nature of the decline is permanent of temporary, and in case they feel there is permanent diminution they were allowed to charge such provision to p&l is 4 quarters of the year 2009.


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08-18-2010, 05:37 AM,
#5
 
ap phalay khan thay bilkul clear kardia hay
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08-18-2010, 02:23 PM,
#6
 
Abi bilcul clear nai hoi ab thora thora km lag raha hay -) entries and types of securities ka jwab nai dia.
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08-18-2010, 02:54 PM,
#7
 
is ka bhi batado pls or balance sheet may june 30 per jo shares hotay kia wo 30 june ki stock kay rate per laitay hain yay bhi clear kardaina
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08-18-2010, 05:26 PM,
#8
 
At balance sheet date Listed securities held for trading are value at rate prevailing in stock exchange at the date of balance sheet and difference is charged to P&L while in case of AFS Listed securities such difference is taken to surplus on revaluation account in BS. Unlisted securities are valued using breakup value of the shares at balance sheet date after taking the impact of any qualification in auditor's report.
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