ICDS VIII – Securities

Scope

Deals with securities held as stock in trade.

This ICDS does not deal with:

(a)    The bases for recognition of interest or dividend;

(b)    Securities held by a person engaged in the business of insurance;

(c)     Securities held by mutual funds, venture capital funds, bank and public financial institutions formed under a Central or State Act or so declared under the companies act 2013

 

Definitions

      Fair Value: is the amount for which an asset could be exchanged between a knowledgeable, willing buyer and a knowledgeable, willing seller in an arm’s length transaction.
      Securities : shall have the meaning assigned to in clause (h) of Section 2 of securities Contract (Regulation) Act, 1956 other than derivatives referred in sub-clause (1a) of that clause.

 

Recognition and Initial Measurement

ICDS 8

Subsequent measurement of Securities

ICDS 8_1

Key differences with AS

ICDS VIII deals with only securities held as stock-in-trade thereby concentrating only on part of AS 13 which deals with both long term and short term investments of all types:

  • ICDS requires securities to be valued at ‘global basis’ (category wise) and not on piecemeal basis.
  • Cost of acquisition in case of acquisition of security by issue of security or by giving up an asset is fair value of securities issued and fair value of asset given up (if clearly available) respectively.
  • Unlisted or thinly traded securities shall be value at cost in ICDS but in AS every security has to be accounted at cost or Fair value whichever is lower.

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