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Future CA
23 Points Posted on 21 May 2021

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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On 21 May 2021 at 13:54 Report
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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.

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Future CA
23 Points Posted on 21 May 2021
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

 

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On 21 May 2021 at 13:57
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Chartered Accountant
24588 Points Posted on 21 May 2021
But why negative capital it's a sign of derogation in statements??
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On 21 May 2021 at 14:11
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Practising CA
8954 Points Posted on 22 May 2021
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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On 22 May 2021 at 11:01

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