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Post Info TOPIC: Can a trading loss be adjusted against Accumulated Reserves in the Balance Sheet?
vsikdar


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Can a trading loss be adjusted against Accumulated Reserves in the Balance Sheet?
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Hi,

 

I needed some clarification.  Please can anyone let me know whether it is possible to adjust a loss in the Profit & Loss A/c against Accumulated Reserves in the Balance Sheet.  The Accumulated Reserves in the Balance Sheet consists of profits from earlier financial years.

 

Thanks very much for any help.

 

Kind regards

Vidya



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Figurate


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That's effectively what happens in the balance sheet anyway.
A current year loss will lower the overall reserves on the balance sheet as at the year-end/balance sheet date.

In software where a "year end" routine is done (such as Sage), the year-end journal will debit the loss to the P&L reserve when the figures are rolled forward to the new year...


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vsikdar


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Hi Figurate,

 

Thanks very much for the clarification.

 

Kind regards,

 

VSikdar



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