AS-21

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Rahul Patwa (Querist)
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17 February 2010 In solving Question of AS-21 cosolidation, we do Net worth Analysis. Can anybody tell me why we Bifurcate the Networth into Capital and Revenue?

CA Amit Joshi

CA Amit Joshi (Expert)
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26 February 2010 We bifurcate Networth into Capital and revenue so that the income of subsidery which it earns before acquisition is captlised.
I want to give u a simple example: If we purchase any assets the exp of before establishment is captlised and exp after it is charged to P&L.
Like it the income which earned by subsidery before acquisition is treated as capita income and income after acque. is treated as revenue income.