Hii,
For the purpose of calculating effective capital ( for calculating managerial remunerstion) , following formula is used:
Add : Paid up capital
Security Premium Account
Reserve and Surplous
Loan
My doubt is that Security premium is part of reserve and surplous, so while mentioning the value of reserve and surplous do we need to again put the value of security premium or after deducting security premium.
For Ex:
Security Premium Account
Opening Balance 88720000
Add : Security Premium Credited 150000000
Closing Balance 238720000
Profit & Loss Account
As per last Balance Sheet (80300)
Closing Balance (80300)
Reserve & Surplous 238639700
Now what sholud be the amount to be shown in security premium account and in Reserve & Surplous, for calculating Effective Capital ??