MEANING OF INADEQUATE PROFIT FOR GIVING REMUNERATION
This query is : Resolved
11 July 2009
PLEASE TELL THE MEANING OF INADEQUATE PROFIT FOR GIVING REMUNERATION
CA. B.SRINIVASULU
(Expert)
11 July 2009
When the company earns cash loss in any year then it is termed as inadequate profit.
For eg.
Sales 10 Lakhs
Exp 12 Lakhs
LOss 2 Lakhs (inadequate profits)
Sales 10 Lakhs
Exp 7 Lakhs
Depn. 5 Lakhs
Loss 2 Lakhs
Cash Profit (loss + depn.) 3 Lakhs
(adequate profits available)
For eg.
Sales 10 Lakhs
Exp 12 Lakhs
LOss 2 Lakhs (inadequate profits)
Sales 10 Lakhs
Exp 7 Lakhs
Depn. 5 Lakhs
Loss 2 Lakhs
Cash Profit (loss + depn.) 3 Lakhs
(adequate profits available)
CA. B.SRINIVASULU
(Expert)
11 July 2009
When the company earns cash loss in any year then it is termed as inadequate profit.
For eg.
Sales 10 Lakhs
Exp 12 Lakhs
LOss 2 Lakhs (inadequate profits)
Sales 10 Lakhs
Exp 7 Lakhs
Depn. 5 Lakhs
Loss 2 Lakhs
Cash Profit (loss + depn.) 3 Lakhs
(adequate profits available)
For eg.
Sales 10 Lakhs
Exp 12 Lakhs
LOss 2 Lakhs (inadequate profits)
Sales 10 Lakhs
Exp 7 Lakhs
Depn. 5 Lakhs
Loss 2 Lakhs
Cash Profit (loss + depn.) 3 Lakhs
(adequate profits available)
CA. B.SRINIVASULU
(Expert)
11 July 2009
When the company earns cash loss in any year then it is termed as inadequate profit.
For eg.
Sales 10 Lakhs
Exp 12 Lakhs
LOss 2 Lakhs (inadequate profits)
Sales 10 Lakhs
Exp 7 Lakhs
Depn. 5 Lakhs
Loss 2 Lakhs
Cash Profit (loss + depn.) 3 Lakhs
(adequate profits available)
For eg.
Sales 10 Lakhs
Exp 12 Lakhs
LOss 2 Lakhs (inadequate profits)
Sales 10 Lakhs
Exp 7 Lakhs
Depn. 5 Lakhs
Loss 2 Lakhs
Cash Profit (loss + depn.) 3 Lakhs
(adequate profits available)
CA. B.SRINIVASULU
(Expert)
11 July 2009
When the company earns cash loss in any year then it is termed as inadequate profit.
For eg.
Sales 10 Lakhs
Exp 12 Lakhs
LOss 2 Lakhs (inadequate profits)
Sales 10 Lakhs
Exp 7 Lakhs
Depn. 5 Lakhs
Loss 2 Lakhs
Cash Profit (loss + depn.) 3 Lakhs
(adequate profits available)
For eg.
Sales 10 Lakhs
Exp 12 Lakhs
LOss 2 Lakhs (inadequate profits)
Sales 10 Lakhs
Exp 7 Lakhs
Depn. 5 Lakhs
Loss 2 Lakhs
Cash Profit (loss + depn.) 3 Lakhs
(adequate profits available)
CA. B.SRINIVASULU
(Expert)
11 July 2009
When the company earns cash loss in any year then it is termed as inadequate profit.
For eg.
Sales 10 Lakhs
Exp 12 Lakhs
LOss 2 Lakhs (inadequate profits)
Sales 10 Lakhs
Exp 7 Lakhs
Depn. 5 Lakhs
Loss 2 Lakhs
Cash Profit (loss + depn.) 3 Lakhs
(adequate profits available)
For eg.
Sales 10 Lakhs
Exp 12 Lakhs
LOss 2 Lakhs (inadequate profits)
Sales 10 Lakhs
Exp 7 Lakhs
Depn. 5 Lakhs
Loss 2 Lakhs
Cash Profit (loss + depn.) 3 Lakhs
(adequate profits available)
CA. B.SRINIVASULU
(Expert)
11 July 2009
When the company earns cash loss in any year then it is termed as inadequate profit.
For eg.
Sales 10 Lakhs
Exp 12 Lakhs
LOss 2 Lakhs (inadequate profits)
Sales 10 Lakhs
Exp 7 Lakhs
Depn. 5 Lakhs
Loss 2 Lakhs
Cash Profit (loss + depn.) 3 Lakhs
(adequate profits available)
For eg.
Sales 10 Lakhs
Exp 12 Lakhs
LOss 2 Lakhs (inadequate profits)
Sales 10 Lakhs
Exp 7 Lakhs
Depn. 5 Lakhs
Loss 2 Lakhs
Cash Profit (loss + depn.) 3 Lakhs
(adequate profits available)
CA. B.SRINIVASULU
(Expert)
11 July 2009
When the company earns cash loss in any year then it is termed as inadequate profit.
For eg.
Sales 10 Lakhs
Exp 12 Lakhs
LOss 2 Lakhs (inadequate profits)
Sales 10 Lakhs
Exp 7 Lakhs
Depn. 5 Lakhs
Loss 2 Lakhs
Cash Profit (loss + depn.) 3 Lakhs
(adequate profits available)
For eg.
Sales 10 Lakhs
Exp 12 Lakhs
LOss 2 Lakhs (inadequate profits)
Sales 10 Lakhs
Exp 7 Lakhs
Depn. 5 Lakhs
Loss 2 Lakhs
Cash Profit (loss + depn.) 3 Lakhs
(adequate profits available)
CA. B.SRINIVASULU
(Expert)
11 July 2009
When the company earns cash loss in any year then it is termed as inadequate profit.
For eg.
Sales 10 Lakhs
Exp 12 Lakhs
LOss 2 Lakhs (inadequate profits)
Sales 10 Lakhs
Exp 7 Lakhs
Depn. 5 Lakhs
Loss 2 Lakhs
Cash Profit (loss + depn.) 3 Lakhs
(adequate profits available)
For eg.
Sales 10 Lakhs
Exp 12 Lakhs
LOss 2 Lakhs (inadequate profits)
Sales 10 Lakhs
Exp 7 Lakhs
Depn. 5 Lakhs
Loss 2 Lakhs
Cash Profit (loss + depn.) 3 Lakhs
(adequate profits available)
Message likes :
1 times
Ankur Garg
(Expert)
13 July 2009
Hi Gaurav,
Lets discuss in a simple way:
Suppose in a financial year your profit are: Rs. 10,00,00,000
Remuneration of M.D. is Rs. 50,00,000 i.e. 5%. Till now everything is fine.
============================================
Now suppose in the next financial year profit fall to Rs. 8,00,00,000.
and remuneration remain the same i.e. Rs. 50,00,000. Now % of remuneration will automatically increase to 6.25%.
This is called inadequate profit as far as remuneration provisions are concerned.
Best Regards
Lets discuss in a simple way:
Suppose in a financial year your profit are: Rs. 10,00,00,000
Remuneration of M.D. is Rs. 50,00,000 i.e. 5%. Till now everything is fine.
============================================
Now suppose in the next financial year profit fall to Rs. 8,00,00,000.
and remuneration remain the same i.e. Rs. 50,00,000. Now % of remuneration will automatically increase to 6.25%.
This is called inadequate profit as far as remuneration provisions are concerned.
Best Regards
Message likes :
4 times
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