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query

BALASUBRAMANYA B N (CCI STUDENT....) (44679 Points)

17 January 2009

hello guys

why is loss an asset ?

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12 Replies

shailesh agarwal (professional accountant) (7642 Points)
Replied 17 January 2009

DUE TO OBSOLENCE AND NOT TO USE-SO MANY OTHE CAUSES

CLEARLY ASK YOUR QUESTION

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Varun Malhotra (Chartered Accountant) (207 Points)
Replied 18 January 2009

ya question is not clear because loss can never be an asset.

payal (student) (106 Points)
Replied 18 January 2009

BALU SIR, I THINK IF YOU ARE REFERRING TO P& L A/C DEBIT BALANCE SHOWN ON THE ASSET SIDE OF THE B/S , THEN IT IS A FICTITIOUS ASSET TO BE SETOFF AS AND WHEN THERE ARE SUFFICIENT PROFITS

ANIRBAN BANERJEE (Student) (298 Points)
Replied 22 January 2009

loss is never considered an asset by a sane person.... p&l debit balance is shown on asset side as a fictitous asset...... besides profit is added with capital (in case of proprietorship business) or shown under reserves & surplus ( refer entity concept - : business & proprietor are separate entities)... which r liability of the business towards its owners.... so loss indicates that the owner has to put something back to the business to avoid erosion of capital.....

Prakash Popat (3134 Points)
Replied 22 January 2009

Arithmatically Reply,Both Assets & Loss having Dr.Balance.

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payal (student) (106 Points)
Replied 23 January 2009

ANIRBAN SIR,

YOU THINK PEOPLE WHO POST P & L A/C DEBIT BALANCE AS A FICTITIOUS ASSET ON THE ASSETS SIDE OF THE BALANCE SHEET ARE INSANE!

CA Devanshi Gandhi (Ajani) (FCA DISA Mcom CIFRS & LLB) (9060 Points)
Replied 28 March 2009

can u clear ur question?

VIJENDRA DARGAR (JOB) (95 Points)
Replied 30 March 2009

IT IS SO COZ WE CAN'T TALLY A BALANCE SHEET WITHOUT SHOWING LOSS (UNADJUSTED) IN ASSET SIDE. WE SHOULD CLEARLY UNDERSTAND THE TERM 'ASSET' IN ACCOUNTING. LOSS REDUCES THE VALUE OF ASSETS. IN A NUTSHELL WE CAN SAY IT A NEGATIVE ASSET.

deepak K Gujrati (CA-practice) (966 Points)
Replied 30 March 2009

Sir ji it is an asset because the firm/institution has to recover this amount from its proprietor,partners.

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VIJENDRA DARGAR (JOB) (95 Points)
Replied 31 March 2009

CONCEPTUALLY U R VERY RIGHT. THNX.

Preeti Agarwal (Articled) (218 Points)
Replied 05 April 2009

I agree with Mr. Deepak. As owner is considered seprate from its business, so if there is loss in business, the firm/business set off this loss from the capital introduced by the owner and accordingly pay the balance amount to its owner in case of winding up/disolution etc. So its becomes an asset for business.