Authors :
Dr. Meena Kumari; Asmita Agrawal
Volume/Issue :
MMK:ACE-2023
Google Scholar :
http://tinyurl.com/48wxv3yw
Scribd :
http://tinyurl.com/4xhnnanw
DOI :
https://doi.org/10.5281/zenodo.10477450
Abstract :
Balance Sheet of a company shows its current
financial position at a particular date while Profit &
Loss shows its performance. Historically, assets and
liabilities were shown in the Balance Sheet on cost basis.
With the adoption of IND AS, various new valuation
techniques measuring the current value like fair value,
recoverable value are gaining acceptance, especially for
assets. However, as the current value concept is being
recommended on asset-to asset basis and not for the
entire Balance Sheet together, it has led to various
heterogeneous techniques being applied across asset
categories. These research paper first identifiesvarious
techniques recommended by IND AS for different asset
categories and then goes on to the practical application
of such recommendations by five listed companies to
whom IND AS applies. It also examines the impact of
such heterogeneous valuation on the financial statements
of companies. Based on the results, the research paper
goes on to advise the investors to be careful while
understanding the valuations in Balance Sheet.
Keywords :
Fair value, IND AS, historical cost, valuation techniques, Balance Sheet, financial assets.
Balance Sheet of a company shows its current
financial position at a particular date while Profit &
Loss shows its performance. Historically, assets and
liabilities were shown in the Balance Sheet on cost basis.
With the adoption of IND AS, various new valuation
techniques measuring the current value like fair value,
recoverable value are gaining acceptance, especially for
assets. However, as the current value concept is being
recommended on asset-to asset basis and not for the
entire Balance Sheet together, it has led to various
heterogeneous techniques being applied across asset
categories. These research paper first identifiesvarious
techniques recommended by IND AS for different asset
categories and then goes on to the practical application
of such recommendations by five listed companies to
whom IND AS applies. It also examines the impact of
such heterogeneous valuation on the financial statements
of companies. Based on the results, the research paper
goes on to advise the investors to be careful while
understanding the valuations in Balance Sheet.
Keywords :
Fair value, IND AS, historical cost, valuation techniques, Balance Sheet, financial assets.
