hello guys
why is loss an asset ?
DUE TO OBSOLENCE AND NOT TO USE-SO MANY OTHE CAUSES
CLEARLY ASK YOUR QUESTION
ya question is not clear because loss can never be an asset.
BALU SIR, I THINK IF YOU ARE REFERRING TO P& L A/C DEBIT BALANCE SHOWN ON THE ASSET SIDE OF THE B/S , THEN IT IS A FICTITIOUS ASSET TO BE SETOFF AS AND WHEN THERE ARE SUFFICIENT PROFITS
loss is never considered an asset by a sane person.... p&l debit balance is shown on asset side as a fictitous asset...... besides profit is added with capital (in case of proprietorship business) or shown under reserves & surplus ( refer entity concept - : business & proprietor are separate entities)... which r liability of the business towards its owners.... so loss indicates that the owner has to put something back to the business to avoid erosion of capital.....
Arithmatically Reply,Both Assets & Loss having Dr.Balance.
ANIRBAN SIR,
YOU THINK PEOPLE WHO POST P & L A/C DEBIT BALANCE AS A FICTITIOUS ASSET ON THE ASSETS SIDE OF THE BALANCE SHEET ARE INSANE!
can u clear ur question?
IT IS SO COZ WE CAN'T TALLY A BALANCE SHEET WITHOUT SHOWING LOSS (UNADJUSTED) IN ASSET SIDE. WE SHOULD CLEARLY UNDERSTAND THE TERM 'ASSET' IN ACCOUNTING. LOSS REDUCES THE VALUE OF ASSETS. IN A NUTSHELL WE CAN SAY IT A NEGATIVE ASSET.
Sir ji it is an asset because the firm/institution has to recover this amount from its proprietor,partners.
CONCEPTUALLY U R VERY RIGHT. THNX.
I agree with Mr. Deepak. As owner is considered seprate from its business, so if there is loss in business, the firm/business set off this loss from the capital introduced by the owner and accordingly pay the balance amount to its owner in case of winding up/disolution etc. So its becomes an asset for business.
Your are not logged in . Please login to post replies
Click here to Login / Register
ADY & CO.
New Delhi
Graduate (Any)
View Details
HKC | Chartered Accountants & Business Advisors
Ludhiana
CA
View Details
CA Suraj Garg & Associates
New Delhi
CA Final
View Details
CCI
Pro
India's largest network for
finance professionals