CA Inter P1 · Chapter 3 · Question 8 of 16
Case: Current investments of Bharat Ceramics Ltd costing ₹3,00,000 are reclassified as long-term investments when their fair value is ₹2,60,000. Under AS 13, the transfer is made at:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) ₹2,60,000
Explanation
AS 13 requires investments reclassified from current to long-term to be transferred at the lower of cost and fair value on the date of transfer. Lower of 3,00,000 and 2,60,000 is ₹2,60,000. (For long-term to current, the transfer is at the lower of cost and carrying amount.)
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