Net Worth
This query is : Resolved
24 August 2009
Sir,while computing networth of a Company, can we add unsecured loans from directors in the formula Share Capital + Reserves and surplus - miscellaneous expenditure? In this case, directors themselves are the shareholders.
Guest
Guest
(Expert)
24 August 2009
Dear Deepa
No, you can't add unsecured loans from Directors (or any other shareholder) in calculating Networth through formula Share Capital+Reserves & Surplus-Misc. Expenditure.
The reason being that the Company has to repay the loan to the Directors even though they are shareholders. Hence, it is a liability.
Hope this assists you.
You can write to me at ca.hims@gmail.com for any further help.
Thanks & Best Regards
ca.hims@gmail.com
I'm a freelance consultant and you can reach at my email ID ca.hims@gmail.com anytime for your advisory needs including CA related, career and financial planning. For more details visit my profile.
No, you can't add unsecured loans from Directors (or any other shareholder) in calculating Networth through formula Share Capital+Reserves & Surplus-Misc. Expenditure.
The reason being that the Company has to repay the loan to the Directors even though they are shareholders. Hence, it is a liability.
Hope this assists you.
You can write to me at ca.hims@gmail.com for any further help.
Thanks & Best Regards
ca.hims@gmail.com
I'm a freelance consultant and you can reach at my email ID ca.hims@gmail.com anytime for your advisory needs including CA related, career and financial planning. For more details visit my profile.
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