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Reserves and Surplus

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imran khan

imran@123

47 Points Posted on 21 January 2021

if R & S negative what it means...
In companies accounts Schedule III

Replies (2)

Quick Summary

Negative Reserves and Surplus in a company's accounts, as per Schedule III of the Companies Act, indicate a net loss for the current year or accumulated losses from previous years. This debit balance of the Profit & Loss account is shown as a negative figure under 'Surplus'. Even after adjustments, if the overall 'Reserve & Surplus' figure remains negative, it is still presented under that heading.

CA. Sourav Sarkar

Chartered Accountant

16188 Points Posted on 21 January 2021

If reserve and surpluses are in negative figure it means that the profit is negative for that year i.e, loss occurs or if any reserve carried forward at losses from previous years.
Under companies act Such R&S should be shown in negative figure in balance sheet under Shareholders Funds and Capital

prasad Nilugal

GST Practitioner & Accounts

8996 Points Posted on 21 January 2021

AS per Schedule III - Debit Balance of Profit & Loss account shall be shown as negative figure under " Surplus " . Similarly balance of Reserve & Surplus " after adjusting negative balance of Surplus , if any , Shall be shown under the head " Reserve & Surplus" even if the resulting figure is in the negative .