Page 269 - CA Final PARAM Digital Book.

v Value of imports calculated on C.I.F. basis by the company during the financial year in respect of:
a) raw materials;
b) components and spare parts;
c) capital goods.

vi Expenditure in foreign currency during the financial year on account of royalty, know-how,
professional and consultation fees, interest, and other matters.

vii Value of all imported raw materials, spare parts and components consumed during the financial
year and the value of all indigenous raw materials, spare parts and components similarly
consumed and the percentage of each to the total consumption.

viii The amount remitted during the year in foreign currencies on account of dividends, with a specific
mention of the number of non-resident shareholders, the number of shares held by them on
which the dividends were due and the year to which the dividends related.

ix Earnings in foreign exchange classified under the following heads, namely:
a. export of goods calculated on F.O.B. basis;
b. royalty, know-how, professional and consultation fees;
c. interest and dividend;
d. other income, indicating the nature thereof.

QNO (Losses in Subsidiary) AS 21- Old Course – (M09R, M13E, M16M, SM17, PM17 SM21, M23M)
444.000 Unique
K Ltd. had 5 subsidiaries as at 31st March 2015 and the investments in-subsidiaries are considered as
long term and valued at cost. Two of the subsidiaries net worth eroded as at 31st March 15 and the
prospects of their recovery are very bleak and the other three subsidiaries are doing exceptionally well.

The company did not provide for the decline in the value of investments in two subsidiaries because the
overall investment portfolio in subsidiaries did not suffer any decline' as the other three subsidiaries are

doing exceptionally well. Comment.
Answer Part I -- Relevant Standards & Laws
▪ AS-13 - Accounting for Investments

Part II -- Requirements of Relevant Standards & law Consolidated
➢ As per AS-13 “Accounting for Investments” issued by the Institute of Chartered Accountants of
India, long-term investments are usually of individual importance to the investing enterprise. The
carrying amount of long-term investments is therefore determined on an individual investment
basis. Investments classified as long-term investments should be carried in the financial
statements at cost. However, provision for diminution shall be made to recognize a decline, other
than temporary, in the value of the investments, such reduction being determined and made for
each investment individually.
Part III – Case Discussion
➢ K Ltd. had 5 subsidiaries as at 31st March 2015 and the investments in-subsidiaries are considered
as long term and valued at cost. Two of the subsidiaries net worth eroded as at 31st March 15 and
the prospects of their recovery are very bleak and the other three subsidiaries are doing
exceptionally well. The company did not provide for the decline in the value of investments in two
subsidiaries because the overall investment portfolio in subsidiaries did not suffer any decline' as
the other three subsidiaries are doing exceptionally well. Comment
Part IV – Conclusion
➢ Keeping in view the above, K Ltd should provide for the decline in the value of investments in two
subsidiaries despite the fact that the overall investment portfolio in subsidiaries did not suffer any
decline.

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