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Sir i watched your lecture but i could not find this answer.
1) What is the difference between capital reserves and revenue reserves?
2) Retained earnings is seperate from these both?
3) Please explain why company tax is a current liability since it is year expense to the SOPL so why are we showing it in SOFP?
You cannot possibly have watched all the lectures on limited companies!!! I spend a lot of time explaining the distinction between capital and revenue reserves, and the fact that retained earnings is the most common revenue reserve!!
Tax is a current liability when it is still owing. The tax for the year isn to known until the accounting statements are prepared and is is therefore accrues at the year end.
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Sir you said that share premium and revaluation reserve are capital reserve so they cannot be distributed.
Do we also consider share capital to be capital reserve since it also cannot be distributable?
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