01 January 2010
Thank you sir.. You mean to say that all appropriations in profit and loss will be called as below the line items..? And what is the criteria for this division ?
01 January 2010
Above the line means profits earned which is shown in the profit and loss account. (Ist part of Profit and Loss A/c)
Below the line means how profits have been utilized for different purposes either in the form of transferring to general reserve, dividend equilisation reserve, etc. (IInd part of the Profit and Loss a/c).
Practically Profit and Loss account and Profit and Loss Appropriation Account is one and same.
First part says about the manner the profits were earned.
Second part says about the distribution/application of the Profits earned.
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