AS 13 – Accounting for Investments ✍️ Remember the basic… — Darshan Makwana — TG.ME

📊 AS 13 – Accounting for Investments ✍️ Remember the basic classification: ❓ Current Investment → Held for short-term purpose ❓ Long-term Investment → Investment other than current 💡 Exam Trick (Very Important ⚡) In the exam, follow these steps: 👉 Step 1: Identify whether the investment is Current or Long-term 👉 Step 2: Check whether the investment is purchased Cum-Interest or Ex-Interest 👉 Step 3: Apply the correct valuation rule 👉 Step 4: Account for interest/dividend separately 👉 Step 5: Check for any permanent decline in value 🧠 Golden Lines (for MCQs + Theory): 📌 Cum-Interest → Purchase price includes accrued interest 📌 Ex-Interest → Purchase price excludes accrued interest ⚡ Most Important Exam Point: Cum-Interest Price = Cost of Investment + Accrued Interest Therefore: 👉 Cost of Investment = Cum-Interest Price − Accrued Interest Ex-Interest Price = Cost of Investment 👉 Accrued interest is separately accounted for as Interest Receivable/Income. 🎯 Pro Tip: Whenever you see Cum-Interest / Ex-Interest, first separate the accrued interest from the investment cost. Then apply the AS 13 valuation rules. • Current Investment → Lower of Cost & Fair Value • Long-term Investment → Cost, subject to provision for permanent decline in value.