Net worth computation

For computation of Net Worth, should we consider :-

Capital reserve, surplus arising on sale of land, Capital Reserve-Nursery Tea Garden, Securities Premium, Revaluation Reserve?

While surplus arising on sale of land is added to Capital reserve, at the same time-there is adjustment (less) on sale of Land + transfer to P & L on account of depreciation of revaled assets from Revaluation Reserve.

Kindly guide. We are from Tea Gardens.

Replies (1)

For computing Net Worth, consider the following:

 1. Capital Reserve: Yes, include it.

 2. Surplus arising on sale of land: Yes, include it, but adjust for the depreciation of revalued assets (explained below).

3. Capital Reserve-Nursery Tea Garden: Yes, include it.

4. Securities Premium: Yes, include it

. 5. Revaluation Reserve: Yes, include it, but adjust for the depreciation of revalued assets (explained below).

Adjustments: - Surplus on sale of land is added to Capital Reserve, but also adjust for the depreciation of revalued assets (transfer to P&L) from Revaluation Reserve. - Depreciation of revalued assets (from Revaluation Reserve) is adjusted against the Surplus on sale of land.

Net Worth computation: 

1. Add: Capital Reserve, Surplus arising on sale of land (adjusted for depreciation), Capital Reserve-Nursery Tea Garden, Securities Premium, and Revaluation Reserve. 

2. Subtract: Depreciation of revalued assets (from Revaluation Reserve) adjusted against Surplus on sale of land.

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