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How to deal with negative capital in balance sheet? Is the neagtive amount transferred to assets side of balance sheet?Why?

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Quick Summary
This discussion addresses how to handle negative capital on a balance sheet. It clarifies that negative capital can either be shown as a negative figure on the liability side or as a positive figure on the asset side. While both methods are technically correct, presenting it on the liability side is generally the preferred approach.

Originally posted by : Harshit Pandey
open quote How to deal with negative capital in balance sheet? Is the neagtive amount transferred to assets side of balance sheet?Why? close quote

 

But why negative capital it's a sign of derogation in statements??
Both the way are correct whether you write the amount in negative on the liability side or write in positive on the asset side.

But generally, liability side is preferred.

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