ICDS VIII - Securities

In this article, we will explain about ICDS VIII and its difference with respective Notified AS.

ICDS VIII Securities

ICDS VIII deals with securities held as stock-in-trade and securities held by a scheduled bank or public financial institutions.

Recognition of Securities

1. A security on acquisition shall be recognized at the actual cost, which include its purchase price and acquisition charges such as brokerage, fees, tax, duty or cess
2. Where a security is acquired in exchange for other securities/assets, the fair value of the security so acquired shall be its actual cost
3. Where unpaid interest has accrued before the acquisition of an interest-bearing security and is included in the price paid for the security, the subsequent receipt of interest is allocated between pre-acquisition and post-acquisition periods; the pre-acquisition portion of the interest is deducted from the actual cost
4. Securities held as stock-in-trade shall be valued at actual cost initially recognized or net realizable value at the end of that previous year, whichever is lower. This comparison of actual cost initially recognised and net realisable value shall be done category wise, as, shares, debt securities and convertible securities
5. The value of securities held as stock-in-trade of a business as on the beginning of the previous year shall be:

i. in case of new business, the cost of securities available, if any, on the day of the commencement of the business

ii. in any other case, the value of the securities of the business as on the close of the immediately preceding previous year.

6. Unlisted shares shall be valued at actual cost initially recognized.

Comparison of ICDS VIII and AS 13

For further reading on these series, check out our next article on ICDS IX.