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  • Company Final Account

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    RISHAB NANGIA
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    This document outlines the calculation of net profits for determining managerial remuneration under Section 198 of the Corporate Final Accounts. It discusses adjustments that must be made to gross profits, including allowed and disallowed incomes and expenses, to arrive at net profits. The net profits are then used to determine whether approval is required from the central government to pay managerial remuneration when a company has no profit or inadequate profit.

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    This document outlines the calculation of net profits for determining managerial remuneration under Section 198 of the Corporate Final Accounts. It discusses adjustments that must be made to gross profits, including allowed and disallowed incomes and expenses, to arrive at net profits. The net profits are then used to determine whether approval is required from the central government to pay managerial remuneration when a company has no profit or inadequate profit.

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    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
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    7 views8 pages

    Company Final Account

    Uploaded by

    RISHAB NANGIA
    This document outlines the calculation of net profits for determining managerial remuneration under Section 198 of the Corporate Final Accounts. It discusses adjustments that must be made to gross profits, including allowed and disallowed incomes and expenses, to arrive at net profits. The net profits are then used to determine whether approval is required from the central government to pay managerial remuneration when a company has no profit or inadequate profit.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
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    Corporate Final Account

    Managerial Remuneration – S 197


    Maximum Remuneration
    S 198 Net Profit
    S 198

    Income Expenses

    Allowed Allowed Disallowed


    Disallowed

    Subsidy I = Interest
    P = Premium on T = Normal Income Tax
    shares or
    debenture

    All other normal R= Repairs but not


    operating Income provision
    F =Forfeiture V = Voluntary Payment, Exgratia
    Shares

    C= Contribution
    u/s 188
    C = Capital Profit C = Capital Loss

    T= Taxes
    abnormal

    B= Bonus, Bad
    debts, Breach

    I= Insurance

    D = Depreciation
    u/s 12, Directors
    fees
    S -198

    198

    Gross
    Net Profit
    Profit

    Allowed Disallowed

    Income Income

    Expenses Expenses
    Remuneration payable by companies having
    No Profit or Inadequate Profit without
    Central Government Approval
    Calculation of Net Profits for Managerial
    Remuneration S-198
     Net Profit is calculated after making the four adjustment
    Fixed Assets and Depreciation

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