Value added statement

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

13 August 2013 Dear Sir/Madam,

In value added statement,
Earning available for distribution = PBT-Depreciation- interest on loan- taxes- employee contribution towards PF

Whether this statement is right or wrong, if it is wrong please specify me which items not considered from profit and loss while making value added statement.

CA Vijeta Verma

CA Vijeta Verma (Expert)
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13 August 2013 It should be Gross value added instead of PBT that has to be computed from Value added statement .
From there you have to prepare a reconciling statement considering major areas GVA and PBT i.e. either pick up GVA and arise on PBT or vice-versa
If you pick up GVA then
PBT=GVA-employee expense(like salaries etc)-director's expense(like salries )-Interest on long term loan-depreciation.
From there calculate PAT & reduce preference dividend to arrive at earning for shareholders

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CA Vijeta Verma

CA Vijeta Verma (Expert)
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13 August 2013 Sample GVA statement
Sales & other expense=xxx(A)

Cost of brought in material and services=xxx
all other expense except any expense relating to director,employees,interest on long term loan.taxes ,shareholders and entity itself(general reserve,retained earning,depreciation etc) =XXX

arrive at value added from above
and then adjust indeirect income and extraordinary items to arrive at gross value added.
Then make above adjustments

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Querist : Anonymous

Querist : Anonymous (Querist)

13 August 2013 Thanks for reply, I got it :)