Skip to main content

Nepalese Company Act - Accounting Treatment and Presentation of Calls in Arrears

प्रा.लिको हकमा चुक्ता पुँजि बराबरको रकम कम्पनिको खातामा जम्मा गर्नै पर्ने कुनै कानुनी व्यवस्था छ ? यदि त्यस्तो व्यवस्था भएको खण्डमा सो बराबरको रकम जम्मा नभएको भएमा वित्तिय विवरण वा वसालतमा कसरी देखाउनु पर्छ ?

A recent circular issued by the Office of Company Register has made it mandatory to submit the original copy of the deposit voucher and bank statement or notarized copy of deposit voucher/bank statement for the share allotment by Company Registrar office. This provision has made all the transactions related to shares both sale and purchase to be done through banking channels only unlike past where companies were showing cash transactions. Please refer to image below for the notice.

However, as raised on the question above, it is possible that the company has not received all of the issued capital or called up capital within the time frame prescribed on the call made to its shareholders. The terminology for such shortfall is "Calls in Arrears".

For Instance: Let's say the company has called/issued 100 shares @ Rs. 100 each. Out of which, the company has received in Bank NRs. 5,000 for 50 shares @ Rs 50 each then, remaining will NRs. 5,000 will be call in arrears. Accounting treatment for the same would be:

Calls in Arrears A/C Dr. 5,000
Bank A/c Dr.                   5,000
To, Share Capital A/c    10,000

Same would be presented in the Liability Side of the Balance Sheet or the Share Capital Schedule of the financial statement, as follows:

Authorized Capital 
1000 shares @ NRs. 100 each                     Rs. 100,000.000
(assuming authorized at the time of registration of the company is 1000 shares @ NRs. 100 each)

Issued Capital
100 shares @ NRs. 100 each                        Rs. 10,000.00

Call in Arrears
50 Shares @ NRs. 100 each                          Rs. 5,000.00

Paid Up Capital
50 Shares @ NRs. 100 each                           Rs. 5,000.00

And, then, calls in arrears of Rs. 5,000 can be disclosed as part of the Notes to Accounts as follows:

The company has issued 100 shares @ NRs. 10 per share but only able to collect capital for 50 shares. The company has plans to collect remaining share amount in next Fiscal Year. It has been booked as Call in Arrears (NRs. 5,000.00) currently.



Labels:
Location: Kathmandu 44600, Nepal

Comments

Post a Comment

Most Viewed

Tax Collection Agency codes for IRD Offices all over Nepal

Inland Revenue Department Nepal has published the agency codes that shall be used for the collection of direct and indirect taxes for the general public's information. Each code consists of 9 numbers. There are in total 59 agency codes currently in use. From these codes, we can classify that there are four types of IRD offices currently in operation. 1) Inland Revenue Office 2) Tax Payer Service Office 3) Large Tax Payer Service Office, and 4) Medium Tax Payer Service Office When shall you use these codes? It shall be used while choosing the agency where the tax should be deposited while completing the form for depositing the taxes. Agency Code list below: S.N. Agency Code Name Address 1 305011620 Inland Revenue Office Lahan 2 305030201 Tax Payer Service office Phidim 3 305030301 Tax Payer Service office Illam 4 305030401 Tax Payer Service office Khandbari 5 305030601 ...
1 comment
Read more

Nepal Accounting Standard (NAS) for Not for Profit Organizations (NGOs and INGOs) 2018 - Basics

Effective Date: Nepal Accounting Standard Board has published an Accounting Standard for Not for Profit Organizations in November 2019 effective Fiscal Year 2077/78 (July 16 2020, and onwards). Any organization adopting it to prior to the date above shall disclose the fact. Applicable Organization: NAS is applicable to all not for profit organization registered with the Social Welfare Council or working in Nepal under a general agreement, or project offices working under the bilateral agreement with Nepal Government and Foreign Government Purpose: Guide Not for Profit Organizations to prepare the general purpose financial statement to the entire non-profit organization as a single reporting entity . Improve the quality of the data to provide adequate information to the users of the financial statements Reduce the diversity that exists among NPOs in accounting practice and presentation We should note that NAS is based on the Going Concern assumption and the concep...
1 comment
Read more

Maximizing Tax Benefits: Understanding Insurance Premium Deductions in Nepalese Income Tax

Question:  If an employee is not enrolled in any retirement fund but has paid 40,000 for life insurance or 10,000 for health insurance, should these insurance payments be subtracted from their taxable income or not?  (this was posed in one of the facebook group) Answer:  Regardless of whether an individual has contributed to a retirement fund, they remain eligible to reduce Rs. 40,000 for life insurance and Rs. 10,000 for health insurance from their taxable income. You might be wondering how?  Let's delve into the deductions permitted by the Nepalese Income Tax Act, 2058, regarding life, health, and property insurance premiums. This blog should help you understand how insurance payments can impact your taxable income. 1) Life Insurance Deduction: For residents holding life insurance, you can claim a deduction of up to Rs. 40,000 or the actual annual premium amount (whichever is lower) from your taxable income. Refer to Annex-1, Clause 12 for this provision. 2) Health...
Post a Comment
Read more