Treatment of written of value of share

This query is : Resolved

pankaj jhalani (Querist)
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15 July 2009 Hello friends,

i have a problem related to treatment of written of the shares.

i just want to give a brief description about the company & query.
the company is engaging in the business of trading of shares. the company maintain the shares as stock. accordingly the company used the increase/decrease of shares.
Around 3-4 years ago, the company has purchased the partly paid up shares from another company. at the time of first call the company has not paid balance amount. the another company has forfeited such shares.

the company forgot the treatment of such forfeited. Now in current year, the company wants to recognised the loss.

plz advise me a proper accounting treatment .
psnksj

CA RAMESH KUMAR AHUJA

CA RAMESH KUMAR AHUJA (Expert)
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15 July 2009 The stock in hand position should be amended accordingly and loss adjusted in the current year. However, an explanatory note to that effect be given in the 'Notes to Accounts'.

pankaj jhalani

pankaj jhalani (Querist)
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15 July 2009 CA Ramesh Kumar Ahuja ji,

plz give me particular entry what will be pass into books for recognising the loss.

suppose 1000 shares having a value of Rs. 40000/-.

CA RAMESH KUMAR AHUJA

CA RAMESH KUMAR AHUJA (Expert)
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16 July 2009 While passing the entry for closing stock you ignore the item(Shares forfieted). No seperate entry is to be passed in this connection.

It is worth mentioning that stock damaged or lost is adjusted in the list of closing stock as the title to these shares is lost by forfieture by the issuing company.

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