net worth of a company
This query is : Resolved
22 November 2007
What do you mean by 'net worth of a company' ? Is it includes only equity share capital or preference share capital also.
22 November 2007
Though Preference share capital is owed by the company to its holders on its liquidation, it also forms part of the Capital structure.
Hence Networth = Equity Share Capital +
PReference Share Capital + Free Reserves . This is Liability side approach. In the Asset side approach it is = Fixed Assets ( NET BLOCK) + Working Capital
Hence Networth = Equity Share Capital +
PReference Share Capital + Free Reserves . This is Liability side approach. In the Asset side approach it is = Fixed Assets ( NET BLOCK) + Working Capital
22 November 2007
PREF. SHARES WITH REDEMPTION PERIOD BEYOND 12 YEARS ARE TREATED AS DEBT.
OTHERWISE IT IS TREATED AS EQUITY.
EQUITY /PREF. SHARE CAPITAL + FREE RESERVES- MISC. EXP. TO THE EXTENT NOT WRITTEN OFF = NETWORTH.
R.V.RAO
OTHERWISE IT IS TREATED AS EQUITY.
EQUITY /PREF. SHARE CAPITAL + FREE RESERVES- MISC. EXP. TO THE EXTENT NOT WRITTEN OFF = NETWORTH.
R.V.RAO
Message likes :
1 times
22 November 2007
Net Worth from Equity Shareholders = Equity + Reserves - Miscellaneous Expenditure.
04 February 2010
Please advise whether Revaluation reserve will be taken in calculating net worth of a company or not
Thanks
Thanks
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- CAPITAL GAIN REDEVELOPED FLAT
- Multiple payment of self assessment tax for A Y 2025-2026
- Requirement under FEMA &RBI
- REGARDING ITR FILING QUESTION
- CLOSING STOCK QUERY
- DUE DATE FOR ITR FILING
- Computation of Dividend
- Gst reverse charge mechanism to be claimed in the month of payment
- ITR 44AD SECTION
- Query regarding Item 61/62/63 vs Item 64 in ITR-3
- GST REGISTRATION REQUIRED TO DIAGNOSTIC UNIT
- Concept of Vendor and customner reconciliation
- Mistake in e-invoice identified after 24 hours
- EXPORT PAYMENT
- NRI ITR2 account in 2025-26.
- Query regarding reporting of exempt foreign remuneration in ITR (AY 2026-27)
- FEMA/RBI treatment — Amazon.ca arbitrage (US buy, Canada sell, goods never enter India)
- Goods return by customer
- INWARD REMITTANCE FOREIGN
- CPC and SAC
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
