Accounting treatment For Earlier losses
This query is : Resolved
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28 July 2022
Dear Sir/MADAM,
We want to convert Our LLP in to Private Limited Company .
As per LLP Agreements , We have transferred Losses for Previous 3 years To partners Fluctuating Capital .
But now We want To Transfer That Losses For Previous years To Reserve and Surplus from Partners Fluctuating Capital .
Can We give this Accounting Treatment Retrospective By Modifying LLP Agreement In Dated Fy 2021-22 ?
Request For Expert View Asap With Relevant Provisions For The same .
We want to convert Our LLP in to Private Limited Company .
As per LLP Agreements , We have transferred Losses for Previous 3 years To partners Fluctuating Capital .
But now We want To Transfer That Losses For Previous years To Reserve and Surplus from Partners Fluctuating Capital .
Can We give this Accounting Treatment Retrospective By Modifying LLP Agreement In Dated Fy 2021-22 ?
Request For Expert View Asap With Relevant Provisions For The same .
29 July 2022
No. Retrospective effect will not be accepted by ITO.
29 July 2022
But As per income tax return , we have carry forward losses for Llp only And not partners account But For Accounting entry , We have transferred To partners account .
Whether that will make any difference ?
Whether that will make any difference ?
29 July 2022
The only question is the original deed should support your working/s.
29 July 2022
Can we amend Original LLP Agreement With Consent of all partner to give retrospective effect of Loss In Current year and reverse the entry or modify the entry For Previous year losses ?
If Not , We want to convert llp Into Private limited Company , How balance reconcile with Income tax return and accounts ?
If Not , We want to convert llp Into Private limited Company , How balance reconcile with Income tax return and accounts ?
29 July 2022
1. For income tax purpose it will not be accepted.
2. Loss would decrease the partners' capital account.
2. Loss would decrease the partners' capital account.
29 July 2022
we can not amend Original LLP Agreement With Consent of all partner to give retrospective effect of Loss In Current year and reverse the entry or modify the entry For Previous year losses. Right ?
29 July 2022
Yes, generally, ITD do not accept such retrospective changes in partnership deed for IT calculations.
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