Skip to content

CMA Final · Direct Tax Laws and International Taxation · Income Computation and Disclosure Standards (ICDS)

Under the Income-tax Act, 2025, the comparison of actual cost and net realisable value for inventory held as securities (other than unlisted or irregularly quoted ones) is made in which manner?

The comparison of actual cost with net realisable value for securities held as inventory is made category-wise, as section 277(3) requires. It is neither security-by-security nor on the whole portfolio, and it is not deferred until the securities are sold.

  1. AIndividually for each security
  2. BCategory-wiseCorrect
  3. COn the entire portfolio as a whole
  4. DOnly at the time of sale of the securities

Explanation

Section 277(3) says the comparison of actual cost and net realisable value of securities is made category-wise. Item-wise comparison would be a different treatment and is not what the section prescribes.

Did you get it right without looking?

One question tells you little. A timed set on Income Computation and Disclosure Standards (ICDS) shows your real accuracy, how long you take and where you lose marks.

Practise Income Computation and Disclosure Standards (ICDS)Free diagnostic mock

More Income Computation and Disclosure Standards (ICDS) questions