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Net profit
Accountancy
When we arrive net profit through profit and loss a/c, is that after all charges...Normally net profit is after what deductions? In Indirect method we arrive profit from two years reserve..when we take such profit we add back all expenses and deduct incomes..so does it include provision for taxation, then how..normally how we calculate net profit?
Answers (3)
Lavanya Chitturi
Can you be precise to what exactly is your doubt? What do you meant by 2 years reserve?
No mam, normally net profit is after or before tax? Is provision for taxation is after tax or not? When we transfer profits to reserves is that after tax?
Thread Starter
Shalini ShaluNo mam, normally net profit is after or before tax? Is provision for taxation is after tax or not? When we transfer profits to reserves is that after tax?
Net profit is after tax. Provision for tax is made on profit before tax. Transfers to reserves are from post tax profits
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