How to present corporate loss in the balance sheet
is it a deduction in retained earnings? What if there's no retained
earning? For instance a newly established corporation.
2006-09-13 21:27:00 · 5 answers · asked by Anonymous in Business & Finance ➔ Corporations
If it is a new company and there is no retained earnings to offset the loss, then you will show the amount as a negative balance with the title Retained Deficit.
Also, if you are showing a Statement of Equity (or Statement of Income and Equity), be sure to label the Retained Earnings section as a Retained Deficit as well.
When there is enough profit to reverse the deficit, change the name back to Retained Earnings.
2006-09-15 05:33:26 · answer #1 · answered by boo's mom 6 · 1⤊ 0⤋
If there is no retained earnings, I suggest you reflect it under Accumulated Loss, under the Stockholder's Equity, as a negative amount, to reflect the Networth of the company.
When Net income will be incurred in the next fiscal year, Retained Earnings will be set-up up, thus the negative Accumulated Loss becomes a Net Loss Carry-Over...to be deducted or offset from the Retained Earnings.
2006-09-13 21:36:38 · answer #2 · answered by Sheepish TinTin 3 · 1⤊ 1⤋
Lisamae9 is correct. Retained Earnings will have a deficit.
2006-09-15 07:32:42 · answer #3 · answered by Jordan K 3 · 1⤊ 0⤋
losses are generally taken out of gross profits if any....if there are no earnings then the loss will be treated as accrued and / or accumulated loss which will be taken from subsequent profits.
2006-09-13 21:31:29 · answer #4 · answered by uknownotlove 3 · 0⤊ 1⤋
You offset it with goodwill for an asset, a lot of it.
Then you depreciate it rapidly to offset your losses.
Isn't it great? And so simple...
2006-09-18 12:41:11 · answer #5 · answered by tuora3 1 · 0⤊ 1⤋