Cost of current investment acquired was 1000but the fair value was - 800. The Investment was recorded at 800. Now the fair value of Investment is…

CA Intermediate · Advanced Accounting · MTP · January 2025
Cost of current investment acquired was 1000but the fair value was - 800. The Investment was recorded at 800. Now the fair value of Investment is 1200. At what value should it be recorded and how much gain will be credited to profit and loss account.
(A) No change is required and it will continue at 800
(B) Current investment will be recorded at 1000 and gain of 200will be credited to profit and loss account.
(C) Current investment will be recorded at 1200 and gain of 400will be credited to profit and loss account.
(D) Current investment will be recorded at 1200 but no gain will be credited to profit and loss account.

Suggested Answer and Working Notes:

Correct Answer: Option (B)

Current investment will be recorded at 1000 and gain of 200will be credited to profit and loss account.

Topics: Amalgamation of Companies

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