Sachin (student) (214 Points)
10 May 20111) While calculating Goodwill, When should we use Closing capital employed and when to use Average capital employed???
2) When calculating Average Capital employed by Using = C.C.E. - 1/2 PAT .... What is included in Profit after tax???... is this Profi after all errors n rectification or Profit after inly errors??
C.A Saurabh Jain
(CA )
(164 Points)
Replied 10 May 2011
If two years balance sheet are given then take average capital employed, if previous years profit after taxes are given then add back taxes ,then do all the adjustments/rectifications and then use average or weighted average of net profits.
If net profits are increasing/decreasing --then take simple average of adjusted net profits and calculate average capital emplyed as CCE- 1/2 recified PAT
If net profits are not increasing /decreasing then take weighted average of adjusted net profits after taxes and average capial employed shall be the closing capital employed of current year.
CA Hemang Shah
(PRACTICE)
(658 Points)
Replied 11 May 2011
PF & ESI Course - Labour Code 2019 Along with Examples and Case Studies
CAclubindia
