1. CURRENT ASSETS • STOCKS VALUATION • INVESTMENTS

2. Stocks Valuation: Concepts (I) • Stocks are CA • Why valuation? • Stocks were bought at different prices • Affects: • Closing Stocks Value • COGS in Trading Account • GP, NP • CA in Balance Sheet • Total Assets Value

3. Valuation Methods FIFO • 1st bought is the 1st to be sold LIFO • Last bought is the 1st to be sold AVCO • Average between 1st & Last

4. Impact of Price Movement Highest CS Lowest COGS ↑GP/NP ↑CA Lowest CS Highest COGS ↓GP/NP ↓ CA In the middle since average In the middle since average The reverse of the above The reverse of the above Since the cheapest are charged out 1st

5. Impact of Under/Over Valued ↑ ↓ ↓ ↓ The reverse

6. Stocks Valuation: Concepts (II) • General rule of: “LOWER OF COST & NET REALISABLE VALUE” • NRV: Selling Price – Selling costs

7. REPORTING BALANCE SHEET AS AT ……. FIXED ASSETS CURRENT LIABILITIES INVESTMENTS ASSETS LONG-TERM LIABILITIES EQUITY INTERESTS CURRENT ASSETS