abhishreshthaa
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Net Asset Value
Factors affecting NAV
Accuracy norms
Frequency of computation
Accounting Regulations
Factors affecting NAV
- Sale and purchase of NAV
- Sale and repurchase of units
- Valuation norms of Assets
- Accruals of Incomes and Expenses
Accuracy norms
- Accrual difficulties
- Should not affect NAV by more then 1%
- Securities and unit difficulties
- Should not affect the NAV by more then 2%
Frequency of computation
- Open ended funds –everyday
- Closed ended listed funds- every week
- Closed ended unlisted funds – once a month or once every three months permitted by SEBI
Accounting Regulations
- SEBI(mutual fund ) regulations –ninth scheledule
- Balance sheet and profit and loss a/c separate for every scheme
- Investment marked to market for NAV purpose
- For thinly traded or non traded securities , fair valuation method to be applied
- NAV includes unit capital, realized and unrealized profits
- Dividends can be declared only out of realized profits
- Investments to be valued on average cost basis for determining profit or loss on sale
- Purchase / sales to be recognized on trade date
- Income equalization account to be maintained
- NPA provisioning mandatory as per SEBI guideline