This document outlines accounting standards for classifying and reporting investments. It defines current and long-term investments and discusses how they should be measured and reported. Current investments are intended to be held less than one year and carried at the lower of cost or fair value. Long-term investments are carried at cost, though declines in value other than temporary require reducing the carrying amount. The standard provides guidance on determining investment costs and proceeds from disposals. It also specifies disclosure requirements regarding accounting policies, income/losses from investments, and aggregate amounts of quoted and unquoted investments.

1. ACCOUNTING
STANDARD- 13
ACCOUNTING FOR
INVESTMENT

2. ACCOUNTING FOR INVESTMENT
The Statement deals with accounting for investments
in the financial statement of enterprises and related
disclosures.
INVESTMENTS
Investment are the assets held by an enterprise for
earning income by way of dividend, interest and
rental for capital appreciation or for other benefits to
the investing enterprise.
Assets held as stock-in-trade are not investment.

3. DOESN’T APPLICABLE TO
This Statement does not deal with:-
(a)The bases for recognition of interest, dividend,
and rental earned on investment which are
covered by AS-9 on Revenue Recognition.
(b)Operating or Finance lease.
(c)Investment of retirement benefit plans and life
insurance company and
(d)mutual funds and/or related asset
management companies, bank and public
financial institution.
(e) Venture Capital Fund

4. DEFINITION
Investment classified as long term investment and
current investment.
CURRENT INVESTMENT
A Current investment is an investment that by its
nature readily realisable and is intended to be held
for not more than one year from the date on which
such investment is made. Current investment are in
the nature of current assets.
LONG TERM INVESTMENT
A Long term investment other than a current
investment.

5. INVESTMENT PROPERTY
An investment property is an investment in land or
building that are not intended to be occupied
subsequently for use by or in the operation of, the
investing enterprises. This may be typical of a
company dealing in properties.
MARKET VALUE OF INVESTMENT
It is the amount obtainable from the sale of
investment in an open market, net of expenses
necessarily to be incurred on or before disposal.

6. FAIR VALUE OF INVESTMENT
Fair value of investment is the amount for which an
asset could be exchanged between a knowledgeable
willing seller in an arm’s length transaction.
Market value is the amount obtainable from the sale
of an investment in open market, net of expenses
necessarily to be incurred on or before disposal.
Some investments have no physical existence and
are represented merely by certificates or similar
document while other exists in physical form.
The nature of an investment may be that of equity or
debt other than short or long term loan or trade
debt.

7. COST OF INVESTMENT
The cost of investment includes cost of acquisition
charges such as brokerage, fees and duties.
If an investment is acquired or partly acquired, by
issue of share or other securities, the acquisition
cost is the fair value of securities issued.
If an investment is acquired in exchange or partly
exchange, for another assets, the acquisition cost
of investment is determined by reference to the
fair market value of the assets given up.
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8. Interest, dividend and rental receivables in
connection with an investment are generally
regarded as income, being return on investment.
However in certain circumstances such inflow
represent a recovery of cost and do not form a
part of income.

9. CARRYING AMOUNT OF INVESTMENT
CURRENT INVESTMENT
The carrying amount for current investment is the
lower of cost and fair value. This follows the
principles of conservation.
LONG TERM INVESTMENT
Long term investment are usually carried at cost.
However, when there is decline, other than
temporary, in the value of a long term investment,
the carrying amount is reduced to recognize the
decline.

10. DISPOSAL OF INVESTMENT
On the disposal of an investment, the difference
between the carrying amount and the disposal
proceed, should be charged or credited to profit
and loss statement.
When disposing of a part of holding of individual
investment, the carrying amount should be
allocated to that part and is to be determined on
the basis of the average carrying amount of the
total holding of the investment.
In respect of share, debentures and other
securities held as stock-in-trade, the cost of stock
disposed off is determined by applying an
appropriate cost formula.

11. DISCLOSURES IN FINANCIAL
STATEMENT
1. The accounting policies for determination of
carrying amount of investment.
2. The amount included in profit or loss statement
for:
(a) Interest, dividend, rental on investment, profit
and losses on sale on current and long term
investment.
(b) Aggregate amount of quoted and unquoted
investment.
(c) Other disclosures as specifically required by the
relevant statue governing the enterprises.