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You are in the business of buying and selling construction materials. You invested AED60 million in a3 star Hotel. Where do you expect to see your investment in your balance sheet?1. Fixed Assets2. Current Assets3. Share Capital4. Other headings
Long term investments can be shown under the Fixed Assets heading whereas short term investments are reported under the Current Assets heading.
1. Long-Term Investment (Non-Current Asset ---- Fixed Asset)
marketable securities ( in shap of short term investment)
invesment ( in shape of long term )
under Long-Term Investment
Investments in associated companies
current assets
If you are construction matrial supplier and you supply the material to3 star hotel and you have not contract to get benifit from the commercial use of hotel or sale of hotel than it is your sale and you will record in P& L Statement.
If you have joint venture with the hotel then you will record AED60 M in Non Current Account of your balance sheet investement in Associates under IAS28. Further any it will increase with gain and loss or any impairment cost at the time of acquisition.
Profit will also hit the P& L Account with Profit on investment in Associate.
Fixed assets
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