Accounting treatment of loss / profit in the case of Pvt. Ltd
This query is : Resolved
20 October 2024
what is treatment of Loss /profit in the case of company.
How to make treatment.
How to make treatment.
22 October 2024
Profit:
A portion of the profit is appropriated for various purposes, such as:
Dividend distribution to shareholders
Transfer to reserves (e.g., general reserve, dividend equalization reserve)
Retained earnings (for future business expansion or contingencies)
Profit is subject to corporate tax, Profit is distributed to shareholders as dividends.
Loss:
Loss is recognized in the profit and loss account.
Loss is absorbed by:
Reducing retained earnings
Utilizing reserves (if available)
Issuing additional shares
Unabsorbed loss can be carried forward to future years to set off against future profits.
A portion of the profit is appropriated for various purposes, such as:
Dividend distribution to shareholders
Transfer to reserves (e.g., general reserve, dividend equalization reserve)
Retained earnings (for future business expansion or contingencies)
Profit is subject to corporate tax, Profit is distributed to shareholders as dividends.
Loss:
Loss is recognized in the profit and loss account.
Loss is absorbed by:
Reducing retained earnings
Utilizing reserves (if available)
Issuing additional shares
Unabsorbed loss can be carried forward to future years to set off against future profits.
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