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Reserves and Surplus

imran khan (imran@123) (47 Points)

21 January 2021

if R & S negative what it means...
In companies accounts Schedule III

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2 Replies

CA. Sourav Sarkar (Chartered Accountant ) (24583 Points)
Replied 21 January 2021

If reserve and surpluses are in negative figure it means that the profit is negative for that year i.e, loss occurs or if any reserve carried forward at losses from previous years.
Under companies act Such R&S should be shown in negative figure in balance sheet under Shareholders Funds and Capital

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prasad Nilugal ( GST Practitioner & Accounts ) (14801 Points)
Replied 21 January 2021

AS per Schedule III - Debit Balance of Profit & Loss account shall be shown as negative figure under " Surplus " . Similarly balance of Reserve & Surplus " after adjusting negative balance of Surplus , if any , Shall be shown under the head " Reserve & Surplus" even if the resulting figure is in the negative .