Beruflich Dokumente
Kultur Dokumente
Figures
for the
current
year
Figures
of the
previous
year
Assets
Share capital
Fixed Assets
Investments
Secured loans
A. Current Assets
B. Loans and
advances
Miscellaneous
Expenditure ( to the
extent not written off)
Profit and loss
Account
Figures
for the
current
year
Figures
of the
previous
year
I. Source of Funds
1. Share holders funds:
a. Capital
b. Reserve and Surplus
2. Loan Funds:
a. Secured Loans
b. Unsecured Loans
Total:
paid up on share capital issued and subscribed. Normally issued, subscribed and paid up
capital are same.
Reserve and Surplus:- Reserve and surplus imply accumulated revenue profit of the
company and capital profit like share premium and revaluation reserve. Reserves may be
broadly of two types- free reserves and specific reserves. Free reserves can be utilized for
any purpose e.g. for payment of dividend, distribution as bonus share, deployment in the
business expansion programme etc. Specific reserves have specific use e.g. debenture
redemption reserve, investment allowance reserve. Specific reserves become free only
when the uses, for which these were created, are met. Surplus denotes the residue of
profit left in the profit and Loss account after distribution of dividend and transfer to
reserves.
Different items to be shown under the schedules of Reserve and surplus
1. Capital Reserve
2. Capital Redemption Reserve
3. Share Premium Account
4. Other Reserves
5. Surplus
6. Proposed addition to reserves
7. Sinking Funds
Loan Funds
Loan funds may come from secured loans which are obtained against security of assets
and unsecured loans. Secured loans are borrowing against security of companys assets. A
loan can be obtained against security of a particular asset or a class of assets. The nature
of security attached is to be specified in each case. If redeemable debentures are issued,
terms of redemption or conversion together with earliest date of redemption or
conversion should be stated. Borrowing without any asset backing are called unsecured
loan. Public deposits, inter corporate deposits, commercial papers are instances of
unsecured borrowing instruments. The subscribers to these instruments depend solely on
the reputation of the issuing company.
Secured loans
1. Debentures
2. Loans and advances from banks
3. Loans and Advances from subsidiaries
4. Other loans and advances
Unsecured loans
1. Fixed Deposits
2. Loans and advances from subsidiaries
3. short term loans and advances
a. from banks
b. from others.
Application of funds
Three major application of funds are i) tangible and intangibles fixed assets titled as gross
block, ii) investments iii) net current assets.
Gross Block
The caption Gross Block covers all the types of fixed assets used in the busines
s. Generally fixed assets are shown at gross value and then accumulated depreciation is
deducted therefrom and net block is also presented.
Fixed Assets:
a. Land & Building
b. Plant and machinery
c. Free hold premises
d. Furniture and Fixture and fittings
e. Vehicles
f. Good will
g. Loose Tools
h. Patent
i. Copy Right
j. Trade mark etc.
Investments:- Assets shown under the head Investments are investments outside the
business. Whenever a company has some free cash it can either temporarily invest
outside the business as short term investments. Companies can also invest money in
subsidiaries, joint ventures and other group of companies and also in different types of
organizations including in Government securities.
been planned to be paid but actually to be declared by the company in its annual general
meeting in future. These are called provisions.
Current liabilities:1. Outstanding expenses
2. Bills payable
3. Sundry Creditors
4. Short-term-Advances
5. Income-tax payable
6. Dividends payable
7. Bank overdraft
Provisions:
1. Provisions for taxation
2. Proposed dividends
3. For contingencies
4. For provident fund scheme
5. For insurance, pension, and similar staff benefit scheme
6. other provision
Miscellaneous expenditure
A company incurs certain expenses like preliminary expenses ( which is incurred at the
time of formation of the company by way of legal fees, registration charges, etc.), share
issue expenses incurred for issuing of equity and preference shares, debentures issue
expenses and so on. These expenses are written off over a period of time as these are
capital expenditure. So they treated as miscellaneous expenditure and to the extent of not
written off is presented in the balance sheet as application of funds.