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M Inam (Querist)
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31 December 2009 What is the meaning of above the line & below the line items in Balance sheet? what are those items....?

CA SURENDRA KUMAR RAKHECHA

CA SURENDRA KUMAR RAKHECHA (Expert)
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31 December 2009 Profit and Loss Account Appropriation is known as Below the Line and Profit and Loss account is known as Above the Line.

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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31 December 2009 Yes,Agree

Murtaza I Bhagat

Murtaza I Bhagat (Expert)
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01 January 2010 I do agree.

M Inam

M Inam (Querist)
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01 January 2010 Thank you sir.. You mean to say that all appropriations in profit and loss will be called as below the line items..? And what is the criteria for this division ?

CA SURENDRA KUMAR RAKHECHA

CA SURENDRA KUMAR RAKHECHA (Expert)
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01 January 2010 Above the line means profits earned which is shown in the profit and loss account. (Ist part of Profit and Loss A/c)

Below the line means how profits have been utilized for different purposes either in the form of transferring to general reserve, dividend equilisation reserve, etc. (IInd part of the Profit and Loss a/c).

Practically Profit and Loss account and Profit and Loss Appropriation Account is one and same.

First part says about the manner the profits were earned.

Second part says about the distribution/application of the Profits earned.