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Calculation of net worth

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See Also

Expense analysis | Profit and loss account / Income statement (D schedule) | Supporting B/S for net worth


Select from the following headings:

Background | Developing the schedule | Completing the Schedule | Standard Sub-Schedules | Carry Forward | Related Errors


Background

This schedule is available for periods ending on or after 1 April 1997. The purpose of the schedule is to calculate the movement between the opening and closing reserves, translated at the opening and closing exchange rates.

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Developing the schedule

The schedule is developed from the D schedule.

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Completing the schedule

Closing balance

This may be either entered manually or transferred from the Supporting B/S for net worth schedule.

Note: for accounting periods ending before 1 April 1997, the supporting schedule will not be available.

Opening balance

This will be completed automatically where a new period is built; alternatively if the schedule is used for the first time, the cell should be completed manually.

Total movement

This is derived by the system.

Adjustments

Adjustments should be made for any items included in reserves which are "below" the profit before tax amount, e.g. taxation, dividends etc. The resulting movement in net worth, which is to be used as the profit before tax basis for the computation, will be checked in the software to the D schedule profit before tax line.

The difference between these amounts is equivalent to the currency translation difference. This amount should be entered as a line on the D schedule, and an Expense analysis schedule developed to show the allowable and disallowable elements of this amount.

Note: the profit and loss schedule must be presented in sterling equivalent.

Entering exchange rates

The user is required to format the currency column to the appropriate currency, and enter any exchange rates required in the software exchange rate syntax, e.g. @$1.634.

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Standard sub-schedules

This schedule has one standard sub-schedule - the supporting balance sheet for net worth.

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Carry forward

The software will carry forward the closing balances for both the reserves and the exchange rate appropriate to the following period.

 

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Related errors

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