Share Holder's Equity

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Dilip Simha G V

Dilip Simha G V (Querist)
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17 March 2011 Hello Sir,

Please guide me how to caluculate Share Holder'd Equity?

CA Ravi Sisodia

CA Ravi Sisodia (Expert)
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17 March 2011 Share Holder'd Equity =
Equity share capital + preference share capital + Reserve & surplus - fictitious assets

CA Ravi Sisodia

CA Ravi Sisodia (Expert)
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17 March 2011 Calculate Shareholders’ Equity (Basic Accounting Equation)

Determine the total assets a company possesses. The formula to compute this figure is long-term assets plus current assets.

Long-term assets are the value of equipment, property and capital assets that are going to be in use for more than 1 year minus any depreciation of these assets.
Current assets are defined as any receivables, work in process, inventory or cash. In accounting terminology, any asset that the company has held for fewer than 12 months is a current asset.

CA Ravi Sisodia

CA Ravi Sisodia (Expert)
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17 March 2011 Establish the total liabilities of a given company. Like the asset calculation, the formula for total liabilities is long-term plus current liabilities.
Long-term liabilities are any debts on the balance sheet that don’t require total repayment within a year.
Current liabilities are the cumulative total of accounts payable, salaries, interest and any other accounts due within a year’s time.

Subtract total liabilities from total assets to determine shareholders’ equity.

Dilip Simha G V

Dilip Simha G V (Querist)
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17 March 2011 Thank u sir.. What is Fictitious Assets?

Dilip Simha G V

Dilip Simha G V (Querist)
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17 March 2011 And what about P & L appropriation?
for computing Share Holder's Equity is it required?

CA Ravi Sisodia

CA Ravi Sisodia (Expert)
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17 March 2011 P & L appropriation is also part of Reserve & surplus.

CA Ravi Sisodia

CA Ravi Sisodia (Expert)
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17 March 2011
Fictitious Assets means =

These are like intangible assets which cannot be seen or touched. Actually these are not assets but some expenditures which cannot trf to profit and loss account of a particular perid that is why these items are shown on assets side of balance sheet to be written off to P&L account in reasonable years

CA Ravi Sisodia

CA Ravi Sisodia (Expert)
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17 March 2011 Asset created by an accounting entry (and included under assets in the balance sheet) that has no tangible existence or realizable value but represents actual cash expenditure. The purpose of creating a fictitious asset is to account for expenses (such as those incurred in starting a business) that cannot be placed under any normal account heading. Fictitious assets are written off as soon as possible against the firm's earnings.

Dilip Simha G V

Dilip Simha G V (Querist)
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17 March 2011 Thank you Sir its very helpfull sir...

CA Ravi Sisodia

CA Ravi Sisodia (Expert)
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17 March 2011 most welcome......

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