what do u mean by investment fluctuation reserve....and what its treatment?
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Investments made by a concern are subject to market fluctuations and thus, the value of an investment can any time decrease suddenly in the market.
So Investment Fluctuation Reserve is maintained to overcome any sudden loss incurred due to a sudden fall in the realizable value of Investments. It acts as a cushion against losses and saves the concern from impact of a sudden loss.
At the time of Dissolution, any Investment Fluctuation Reserve arising in the Balance Sheet is transferred to the Realization A/c.
The Journal Entry for the same is:
Investment Fluctuation Reserve A/c - Dr.
To Realization A/c
So Investment Fluctuation Reserve is maintained to overcome any sudden loss incurred due to a sudden fall in the realizable value of Investments. It acts as a cushion against losses and saves the concern from impact of a sudden loss.
At the time of Dissolution, any Investment Fluctuation Reserve arising in the Balance Sheet is transferred to the Realization A/c.
The Journal Entry for the same is:
Investment Fluctuation Reserve A/c - Dr.
To Realization A/c
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