Net Worth

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Deepa (Querist)
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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.

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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)
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26 August 2009 thank you sir

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