Let me know while calculating net worth of a company, we should consider share application money or not
VIJAY GUPTA (FINANCE PROFESSIONAL) (24 Points)
23 August 2013Let me know while calculating net worth of a company, we should consider share application money or not
Aman
(Finance Professional)
(604 Points)
Replied 23 August 2013
no....share alloted money should be considered
mukesh jha
(CA-FINAL)
(23 Points)
Replied 23 August 2013
it is not added while calculating net worth of company.networth means aggregate of paid up equity capital and free reserves ( excluding reserves created out of revalution) reduced by the aggregate value of accumulated losses and deffered expenditure not written off(including miscellaneous expenditure not written off).
share application money will not be consider because it does't comes under paid up capital.
RAVITOSH KUMAR
(Executive)
(324 Points)
Replied 25 August 2013
In the new Companies Bill, also credit balance in Profit & Loss A/c has been excluded in the calculation of Net Worth - Clause 2(57). Further, Profit & Loss balance and Share Premium A/c are not considered as Free Reserves.
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