Sure OPENING STOCK Firstly, remember that the opening stock are listed on the debit side of the Profit and Loss Account. - If the Opening stock is valued too high (Overvalued) - This means assessee is recording higher expenses, which makes the profit seem less than it really is. To get the accurate Profit, you must add back the difference to compute PGBP. - If the opening stock is valued too low (Undervalued) - This means assessee is showing less expenses. Now, you need to increase the expenses. When expenses go up, profits go down. So, subtract the undervalued amount while calculating PGBP. CLOSING STOCK (Credit side of the P&L Account) - If the closing stock is valued too high (Overvalued) - This means assessee has already shown more income. To find the correct PGBP, you need to subtract the excess value. - If the closing stock is valued low (undervalued) - It means the assessee is showing less income, so you need to increase the income at the time of computation. So, add it back. I believe now it is clear, do let me know if still there is any doubt.
sir can you please do quick revison of chart salay n ifos
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Sir regarding PGBP, could please explain the treatment regarding overvaluation and undervaluation of opening and closing stock
Sure
OPENING STOCK
Firstly, remember that the opening stock are listed on the debit side of the Profit and Loss Account.
- If the Opening stock is valued too high (Overvalued) - This means assessee is recording higher expenses, which makes the profit seem less than it really is. To get the accurate Profit, you must add back the difference to compute PGBP.
- If the opening stock is valued too low (Undervalued) - This means assessee is showing less expenses. Now, you need to increase the expenses. When expenses go up, profits go down. So, subtract the undervalued amount while calculating PGBP.
CLOSING STOCK (Credit side of the P&L Account)
- If the closing stock is valued too high (Overvalued) - This means assessee has already shown more income. To find the correct PGBP, you need to subtract the excess value.
- If the closing stock is valued low (undervalued) - It means the assessee is showing less income, so you need to increase the income at the time of computation. So, add it back.
I believe now it is clear, do let me know if still there is any doubt.
@@RajatMogha yes sir! ♥ Absolutely clear 💯 🙏
Excellent teaching sir thank you so much sir ❤
Is this for jan 25
sir when does 1hr revison video for capital gains is uploaded
Tomorrow
Thank you
Nicely done