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Recently read an annual report wherein a company having profit of 2cr has increased its reserves by 29cr. How is this possible? The company was just listed in sme category
The company may have actually accrued their earnings, and also profit isn't the only income. Compnay could have made a windfall gain by selling some real estate etc and then held on to that income.
These are few possible ways for the increase of reserves: Share Issuance or Bonus Shares: The company might have issued additional shares or granted bonus shares to existing shareholders. When new shares are issued or bonus shares are given, the company's reserves can increase without a direct increase in profit. Revaluation of Assets: The company may have revalued its assets, such as land, buildings, or investments. If the value of these assets increases on the balance sheet, it can lead to a higher amount being added to reserves. Capitalization of Profits: Instead of distributing profits as dividends, a company may choose to capitalize them. Capitalization involves converting profits into additional shares or other forms of capital, contributing to an increase in reserves. Issue of Debentures or Loans: The company might have raised funds through the issuance of debentures or loans. When a company borrows money, it increases its liabilities, but the funds received contribute to the reserves. Government Grants or Subsidies: The company might have received government grants or subsidies, which are sometimes treated as reserves on the balance sheet. Accounting Adjustments: Certain accounting adjustments or changes in accounting policies can impact reserves. For example, a change in the method of depreciation or reclassification of certain items can influence the reported reserves. Retained Earnings: Even if the net profit for the year is not substantial, the company might have retained earnings from previous years, contributing to the overall increase in reserves. Hope this helped🙂
Will need full details to conclude. My TH-cam Channel has over 2200 videos on various aspects relating to Finance, Accounts, Costing, Companies Act, Strategic Management, IndASs/IFRSs, Insolvency, Business Valuations, India’s and Global Economy, Independent Director, Corporate Governance, Leadership and Work Life Balance. On LinkedIn, I have over 25000 followers. Join me now on TH-cam and LinkedIn for regular updates on the above aspects Visit, benefit, like, subscribe & share with all. PS : Please recommend our channel to all your acquaintances.
Difficult to conclude. My TH-cam Channel has over 2200 videos on various aspects relating to Finance, Accounts, Costing, Companies Act, Strategic Management, IndASs/IFRSs, Insolvency, Business Valuations, India’s and Global Economy, Independent Director, Corporate Governance, Leadership and Work Life Balance. On LinkedIn, I have over 25000 followers. Join me now on TH-cam and LinkedIn for regular updates on the above aspects Visit, benefit, like, subscribe & share with all. PS : Please recommend our channel to all your acquaintances.
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Sir please help me. In our organisation we budget for different activities out of the capital fund, so at last there will be some amount remaining extra which we put it as Reserve fund to use later in case of budget deficit. For example, Capital is Rs. 30 Lakhs : 29 lakhs is budgeted for different activities. Remaining amount i.e. Rs. 1 Lakh is put to Reserve fund A/c. My question is how to adjust the capital and Reserve separately in Tally 9? Thank You.
sir i was checking out HUL balance sheet on moneycontrol and didn't understand one thing...their reserves and surplus was around 8000 cr in march 20 and it has jumped to Rs 47000 cr in march 21...what else do companies show in reserves and surplus?...i would be very thankful if you can help me out with this?
Very simple and logical explanation!
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Great job done ☑️
Thank you.
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Very nice explanation sir
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Thanks a lot for this video❤
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@@capramodjain3720 sure sir. I found your videos so valuable for my learning to check company fundamentals before investing in the stock market.
Good explain
Thank you
Sir please clarify if a company has enough reserve and surplus then why the company takes loan for expansion
Because companies want to grow aggressively.
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Recently read an annual report wherein a company having profit of 2cr has increased its reserves by 29cr. How is this possible? The company was just listed in sme category
The company may have actually accrued their earnings, and also profit isn't the only income. Compnay could have made a windfall gain by selling some real estate etc and then held on to that income.
These are few possible ways for the increase of reserves:
Share Issuance or Bonus Shares: The company might have issued additional shares or granted bonus shares to existing shareholders. When new shares are issued or bonus shares are given, the company's reserves can increase without a direct increase in profit.
Revaluation of Assets: The company may have revalued its assets, such as land, buildings, or investments. If the value of these assets increases on the balance sheet, it can lead to a higher amount being added to reserves.
Capitalization of Profits: Instead of distributing profits as dividends, a company may choose to capitalize them. Capitalization involves converting profits into additional shares or other forms of capital, contributing to an increase in reserves.
Issue of Debentures or Loans: The company might have raised funds through the issuance of debentures or loans. When a company borrows money, it increases its liabilities, but the funds received contribute to the reserves.
Government Grants or Subsidies: The company might have received government grants or subsidies, which are sometimes treated as reserves on the balance sheet.
Accounting Adjustments: Certain accounting adjustments or changes in accounting policies can impact reserves. For example, a change in the method of depreciation or reclassification of certain items can influence the reported reserves.
Retained Earnings: Even if the net profit for the year is not substantial, the company might have retained earnings from previous years, contributing to the overall increase in reserves.
Hope this helped🙂
Will need full details to conclude.
My TH-cam Channel has over 2200 videos on various aspects relating to Finance, Accounts, Costing, Companies Act, Strategic Management, IndASs/IFRSs, Insolvency, Business Valuations, India’s and Global Economy, Independent Director, Corporate Governance, Leadership and Work Life Balance.
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Join me now on TH-cam and LinkedIn for regular updates on the above aspects
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PS : Please recommend our channel to all your acquaintances.
Difficult to conclude.
My TH-cam Channel has over 2200 videos on various aspects relating to Finance, Accounts, Costing, Companies Act, Strategic Management, IndASs/IFRSs, Insolvency, Business Valuations, India’s and Global Economy, Independent Director, Corporate Governance, Leadership and Work Life Balance.
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very helpful. thanks a lot!
Thank you
NICE SIR
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Very good sir keep it up
Thank you so much.
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GREAT
Thank you
Also, please share it with all your others acquaintances.
Shareholders are not entitled to demand dividends 😂 until they are declared otherwise.
Amazing sir.. Great
Thank you 🙏
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Sir please help me.
In our organisation we budget for different activities out of the capital fund, so at last there will be some amount remaining extra which we put it as Reserve fund to use later in case of budget deficit.
For example, Capital is Rs. 30 Lakhs :
29 lakhs is budgeted for different activities.
Remaining amount i.e. Rs. 1 Lakh is put to Reserve fund A/c.
My question is how to adjust the capital and Reserve separately in Tally 9?
Thank You.
No, its not like that.
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@@capramodjain3720 then how sir?
If we buy asset by using general reserved then how we make journal up to salvage value??? TIA
No its not like that
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Logic op
It is more helpful and easily understandable.
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Get lecture
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Thank you guru g . Guru g please apne student to chup kariye padhate vakt . Disturb kr rha hai.
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sir i was checking out HUL balance sheet on moneycontrol and didn't understand one thing...their reserves and surplus was around 8000 cr in march 20 and it has jumped to Rs 47000 cr in march 21...what else do companies show in reserves and surplus?...i would be very thankful if you can help me out with this?
They buy the company
@@intelligentinvestor8882 didn't got your view?
Hul buy gsk company thats why their reserve increases massively
@@intelligentinvestor8882 acha ..okay ...i got this now... thanks for this ..
@@ShaikhNadeem no problem