Accounting treatment of loss on investment

[mmm]

How is loss loss on investment accounted for in the financial statements from the trial balance to the balance sheet.

[Odyssee]

The value of the Investments (Asset) in the Balance Sheet should be reduced by the amount of the "loss on investment" mentioned in the trial balance.

[Odyssee]

Retained Profit will also be reduced by the same amount....if it was not included as an expense in the P&L.

[shahid amin]

The losses of investmetn is capital loss. according to my point of view these losses against capital gains for examle loss from property is adjusted against the gain from property.



Best Regards
Shahid Amin

[awaisaftab]

Treatment mentioned by Odysee is correct. Hence loss on investment is capital loss so it will be adjusted against investment in the balance sheet.

Regards,

Awais Aftab

[shahid amin]

<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica, san" id="quote">quote<hr height="1" noshade id="quote"><i>Originally posted by awaisaftab</i>
<br />Treatment mentioned by Odysee is correct. Hence loss on investment is capital loss so it will be adjusted against investment in the balance sheet.

Regards,

Awais Aftab
<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">
Sir I have a question
If investment in balance sheet is lees than the loss on investment then what will we do?

[fpaimran]

Dear,

Are you asking for impairment loss of investment or loss on sale of investment. Please elaborate your question in detail.

[hshamsi]

loss on investment is taken into account equal to the amount of investment in that company.