Calculation of average capital employed
This query is : Resolved
22 April 2015
Sir
Kindly answer my query.
While calculating Rectified PAT (to find out avg. Capital employed) Why don't we consider
overvaluation of Stock , despite of the fact that it is an error.
Also, please clarify what is the logic behind this formula of deducting 1/2 Rectified PAT from closing Capital Employed to arrive at average capital employed.
Kindly answer my query.
While calculating Rectified PAT (to find out avg. Capital employed) Why don't we consider
overvaluation of Stock , despite of the fact that it is an error.
Also, please clarify what is the logic behind this formula of deducting 1/2 Rectified PAT from closing Capital Employed to arrive at average capital employed.
CA AnKiT BoHrA (AB)
(Expert)
22 April 2015
1/2 pat is deducted because u need average capital employed....
and full pat means profit for the year.. to make it average we divide it by 2
so that the final calculation of average capital empl. wil b more near to perfect
1/2 pat is deducted because u need average capital employed....
and full pat means profit for the year.. to make it average we divide it by 2
so that the final calculation of average capital empl. wil b more near to perfect
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CA AnKiT BoHrA (AB)
(Expert)
22 April 2015
overvaluation wil not effect the average capital employed... thats why we ignore this
22 April 2015
Sir
Why Overvaluation of closing stock not considered as an error while calculating rectified PAT???
Please Explain.
Also , clarify what kind of rectifications are we talking about here??
Why Overvaluation of closing stock not considered as an error while calculating rectified PAT???
Please Explain.
Also , clarify what kind of rectifications are we talking about here??
CA AnKiT BoHrA (AB)
(Expert)
23 April 2015
because this required error wil have two effect.. one for addition one for deletion in opening and closing stock... so u can ignore that
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CA AnKiT BoHrA (AB)
(Expert)
24 April 2015
your welcome.. while replying thnks in querries in expert section.. do close the querry dear...
All the best
All the best
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