Net Worth

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This query is : Resolved

Deepa (Querist)

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

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Deepa

Deepa (Querist)

26 August 2009 thank you sir

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