Financial Reporting and Analysis (FRA) : Sobhesh Kumar

Agarwalla

Evaluation Criteria
# Heads % weightage
1 Class Participation and attendance 10%
2 Assignments and class preparation submission 30%
3 Quizzes 30%
4 Examination 30%

- 2 Surprise quizzes (information before 1 hour)

- Assignments are self-learning tools Linked to higher scores; Trade-off between long term
learning and marks

Important Habit to develop

Start Reading annual report of one company and its group every week

Course teaching Methodology and Necessary time to be

put in
1. Need to put in 3 hours for any session
2. 10 mins doubt clearing session try to put in questions

17th April, 2017, Session 1

1. Users of Financial Reporting and Analysis (FRA) Annual Company Report
a) Shareholders
a. Current
b. Potential
b) Employers but not management (Management makes annual report)
a. Need to know how the company is performing
c) Creditors
a. Goods (Suppliers)
b. Cash (bank, financial information)
d) Customers (especially in such industries)
a. B2B
b. Long-term contracts
e) Regulatory authority
f) Others (Academic Researcher, competitors)
2. Important concepts
 a) FRA is not same as Management accounting

FRA Management Accounting

External to company Internal to company

b) FRA is not same as Tax accounting

FA A/C TAX A/C

Abide by Companys act Abide by Income tax act
Flexible and prescriptive rather than water Water tight compartments not much scope
tight compartments of manipulation

3. Need for FRA

Flow Diagram showing representation of FRA

Transactions (Dictionary rules, policies) B/S,CF,IS (Auditor)Stakeholders

Management B/S,CF,IS (Auditor) Stakeholders

4. Auditors are appointed by stakeholders in AGM Meetings

a. Independent auditor
b. 3rd Party auditor
Ensured by
a) ICA (code of professional body)
b) Rights, rules and responsibilities defined by statute
5. Cash Flow statement
a. Ancillary and newer item in annual reports, initially this was not there
b. No new data is seek for such statement every data in cash flow operation is derived from
BS and P&L
c. Main purpose is for ready to use stature
6. Policies for accounting are broadly

# Rules Based Principles based

1 US GAAP IFRS (Indian companies will transition
in 3 years to IFRS)
2 Mammoth and huge as for every industry it Comparatively small
has to be made
3 Objective and Detailed Flexibility is there

Tendency to move to international standards. One across different geographies.

7. Broad Categories of Balance Sheet

- Point of time/ Stock statement/ Photograph at a time
- Any event becomes a transaction if change in assets, liability, owernships equity
 - Current Assets Converted into cash in one operating cycle or 1 year. Generally one operating
cycle is one year. For ex In a winery, if wines are for kept for a period of 100 years then wine
will be considered current assets
- Provisions Known but estimated liabilities; Example a) Gratuity (expense of your employees
will depend on many factors and the exact value cannot be calculated; hence this is kept as
provisions
- Restated Earnings If there is an error in previous annual report, then report the same as
restated earnings
- Good-will is not mentioned in annual reports Rationale for the same is annual reports stand for
o Relevance
o Reliability/Objectivity
o Feasibility
And Good-will violate the reliability/objectivity clause
- Good-will if paid by a company to another company and that amount is quantifiable (especially
when company has a subsidiary and the parent company charges an amount for the brand every
year)

# Assets Liability Owners Equity

1 Cash Accounts Payable suppliers
who have given product, but not
received money
2 Land Debts
3 Inventory Loans
- Raw Materials
- Work-in-progress
- Finished Goods
- Stores and spares
(consumables)
4 Debtors/Accounts receivable O/S expense (salary payable, rent
Accounts receivable is basically payable)
for items sold and cash not
received
5 Prepaid Expense (examples such Accrued Expense
as)
- Prepaid Salary
- Prepaid rent
6 Investments Tax payable
7 Franchise, IP, Patent Interest Payment
8 Advanced Liability customers

18th April, 2017, Session 2

1. What is unrealized Gains?
Due to some currency conversion, we expect some gain it qualifies as unrealized gains
2. General Practice For those assets which have completely depreciated, we keep the value of asset
as a very low number Rs 1 or such thing; dont strike the asset altogether unless the building is
demolished or closed
3. In case of proprietorship, it is mentioned drawings and in case of organization, it is mentioned equity
4. Owners Equity = New Capital (NC) Drawings (D) + Profit (P)
5. Owners Equity can change only if there is a change of
a. NC (New Capital)
b. D (Drawings)
c. P (Profit)
To justify the claim, a vegetable seller has taken loan of 10000

Takes loan from bank Cash - 10000 Capital 10000

Buys inventory of the Inventory 10000 Capital 10000
cash
Sold the amount in Cash 14000 Capital 10000 + 4000 4000 is
14000 the profit he makes (selling price
The equation can buying price)
equate if profit of 4000
is added to capital
He draws 10000 for Cash 4000 Capital 14000 10000 4000 is
himself drawings that the owner does
He invests again 6000 Cash 10000 Capital 4000 + 6000 = 10000
6000 is New Capital

6. Assets = Liabilities + Owners Equity (NC Drawings + Profit)

Detailed Equation: Assets = Liabilities + New Capital Drawings + Revenues Expenses
7. An income statement is a flow statement, more detailed
8. Accrual Method and Cash method

# Accrual Method Cash Method

1 Revenue should be Receipt cash is revenue
a) earned during the period and
b) realized or realizable in that period
2 Value of all goods and services consumed within Paid Cash is expense
the period
When something is consumed
a) Product Related Expense - To bring
products into current place and current
state (includes transportation, related
insurance, storage of raw materials)
b) Period Related Expense
Advertisement, marketing, storage of
finished goods
3 Applicable across every industry; Rationale Applicable only in
People can bluff in cash method; better method - Govt (budgeting) Cash receipts
and cash paid. They dont prepare
balance sheet
 - Indian Railways
Its accrued income but not revenue if they
receive money but have not given service

9. Expenditure | Expense
Expenditure is acquiring an asset. Ex Fruit vendor buys from a wholesaler. The fruits he got is an
asset. Its expenditure for that vendor.
Expense is consuming an asset. Ex Fruit vendor eats fruits then it is an expense.
10. Drawings and dividend are not expenses. Both are distribution of profit. It is deducted from owners
equity.
Not Expenses
a) Drawings
b) Dividends
c) Tax on dividend
11. Financial Income It is interest and dividend income. Its shown separately because its not
operating income
12. Financial expenses Interest paid or to be paid

19th April, 2017, Session 3

1. Going Concern Principle Assumption that an entity will remain in business for the foreseeable
future. Conversely, this means that the entity will not be forced to halt operations and liquidate its
assets in the near term at what may be very low fire-sale prices
Hence because of this principle Non-refundable security deposit shall be asset
2. Depreciation = (Cost Estimated Salvage Value) / Estimated life
3. Solving Tendulya Case basis double entry mechanism

# Assets = Liabilities + New Drawings Revenue - Expenses

Capit +
al -
1. Cash + 15000 2. Revenue
Sales
+15000
1. Account Receivable + 2. Revenue
5200 Sales +
5200
1. Cash + 4000
2. Accounts Receivable
4000
1. Cash + 600 2. Revenue
sales +
600
1. Increase in Inventory + 2. Increase
8900 in
expense -
8900
1. Cash 1200 2. Increase
in
expense +
1200
1. Cash 1200 2. Drawi
ngs +
1200
1. Salary 2. Increase
payable+ in
600 expense
+600
2. Inventory 50 1. Drawi
ngs +
50
1. Asset Furniture 3. Loss + 300
1200 4. Depreciati
2. Asset Cash + 800 on + 100
2. Liabilitie 1. Provision
s + 520
-520

Assignment 1
1. Is Depreciation expense (income statement) cumulative or just for the year?
2. Equation stands
End Inventory = Opening Inventory + Brought Inventory Cost of Goods sold
3. What is COGS(Cost of goods sold)/Cost of sales (cost related to production)?
COGS are the direct costs attributable to the production of the goods sold by the company. This
amount includes the cost of the materials used in creating the good along with the direct labor costs
used to produce the good.
- Cost of creating the products that a company sells
- Only costs included in the measure are those that are directly tied to the production of the
products
- Appears on income statement as expense and can be deducted from revenue to get gross
margin
4. How COGS (COGS sold during the period was 30,000) appear in the equation (A=L+NC-D+R-E)?
5. Why inventory is expense?
24th April, 2017, Session 4
1. PQR Limited
a. Items shown in balance sheet such as Accumulated depreciation is only for assets in
business, not for items sold during the year
b. Items shown in P&L such as depreciated expenses is for all assets irrespective of in business
or not
2. How practically the transactions are reported in an organization
Company will create with the aid of computer and systems individual T-accounts and all entries are
recorded in one account.
Two types of account
a) Permanent Account
a. Items of balance sheet such as Assets, liability, owners equity
b. Carry forward the same year on year
b) Temporary Account
a. Items of profit & loss such as revenue & expenses
b. Every year we start and close the account the input of this is taken to balance sheet
c. Revenue and expenses start fresh every year
3. Contra Account
- Negate an account
- Account and its contra account go hand-in-hand
4. Accounts Receivable is a collective account
5. Recording basis Gross or Net

# Gross For Revenue from Operations
1 It means that recording the revenue through
other income sources and subtracting
expenses
Ex Sold a car for Rs 5 lakh, profit over
depreciation expense Rs 0.5 lakh
Record a) Revenue Rs 5 lakh
b) Expenses Rs 4.5 Lakh
Net For Revenue from other sources
It means only taking the balance as revenue
Ex Sold a car for Rs 5 lakh, the depreciated
value of the car is Rs 4.5 lakh
Record a) Profit of Rs 0.5 lakh instead of
both sold card and value of car

2 Rationale In such example of a company just acting as

Can inflate the top-line Ex- a company before agents of prepaid TV vouchers only net the
release of annual report sold prepaid TV agent commission shall be added as revenue
vouchers, which they reported the full value as and not (Total revenue & subtract the
revenue. Though they were actually agents of expenses)
the vouchers. CEO had the profit linked to
revenue hence he used this method to
inflate the same

Provision Doubtful debts PDF shared

1. Rationale for Contra Account Provision for Doubtful Debts
Accounts Receivable is a collectible account: It reports the amount owed by the customers to the
firm.
 In case for provision for doubtful debt (when we dont know the customer, but with past experiences
can quantify % to doubtful debt) - then we need to reduce the accounts receivable, but we cant do
so as the account is collectible to all customers. Hence we need a contra account named Provisions
for Doubtful debts
2. Bad Debt / Provision for Doubtful Debts
Bad Debt : An amount is written off as bad when the firm is not reasonably certain of the
collectability This can happen, for example, when a customer expresses its inability to pay, or the
new customer is declared bankrupt or if a customers account is long overdue
Provision for Doubtful debts : Although on an individual account basis, the firm considers each
amount to be realizable, past experiences of the firm may indicate that on an aggregate basis, a
portion of the outstandings may not be collectible. In such cases, conservatism principle mandates
that the asset value should be reduced in the book. This is done by creating a contra receivable
account (termed provision for doubtful debts), that will lower the net accounts receivable balance
in the balance sheet so that it reflects the estimated realizable value.

# Bad Debt Provision for Doubtful Debt

1 Actual Bad Debt III. You dont know which customer is going to go bad. Therefore, we create a Contra
I. Reduce accounts receivable asset that is shown as a deduction from accounts receivable
and decreases provision for IV. Increases the amount that should be booked as expense during the years
doubtful debts account
II. Technically actual bad debt
reduces the provision that
you had created by booking
an expense in the P&L/ IS.
2 Expense for the year (C-O)+(A-R)= Closing provision + (Actual expenses Opening
Provision)-Bad debt recovered
3 Bad Debt Recovered Closing provision Your closing provision for doubtful debt should be sufficient to meet
I. Increase cash balance your estimate of the future bad debts from the closing balance of accounts receivable.
II. Increase provision for Derived from closing provision for doubtful debts
doubtful debts accounts
Expense that you have to
book will be lower
4 Why we create
Conservative: Some of the existing receivables may not be recovered
Matching principle: Expenses should be recognized in the same year when sales/revenue
was recognized

3. Expense for each year will be such that desired closing balance of provision is maintained, and is
calculated using the formula
Desired closing balance of provision + actual bad debts during the period actual bad debt
recovered opening balance of provision.
The whole focus is first deriving the closing balance Many regulatory and statutory guidelines and
regulations help in deriving the closing balance.
Understanding from 3 Questions
1. Provision for doubtful debt (post first year) will be inclusive of bad debt (specific account) and
provision of doubtful debt
2. The bad debt expense will be co-related to provision for doubtful debt (post first year).

Provisions for Doubtful debts PPT HO pdf shared

1. Questions
a) XYZ limited pays the salary of March 2015 on 4 th April, 2015. What is the entry of unpaid salary
for the year 2014-15 :
c) Unpaid salary for the year as within the year shall be Salary of March month
d) Heads a) Liability (accounts payable) b) Expenses (salary payable)
b) XYZ limited pays annual bonuses to employees after 360 degree review, that usually gets
completed during August
I. What heads are going to affect Liability (accounts payable) and expenses (salary
payable).
II. How will you calculate the amount tentative amount per employee * no. of employees
a ball-park value as accounts payable (in liability) and salary payable (in expenses)
III. Is there a difference between above a) question and this liability-expense combination
Both are on similar fashion

c) Suppose, both the actual salary and actual bonus come to be (materially) different than what
has been booked at the end of the year. Would you record the differences in the same way for
both the cases in the next accounting years?
Yes, we record both the same in similar fashion

Errors vs Change in Accounting Estimates

# Prior period errors
1 Will Require restatements
2 Prior period errors are omissions from, and
misstatements in, the entitys financial
statements for one or more prior periods
arising from a failure to use, or misuse of
reliable information that
I. Was available when financial information
for those periods were approved for issues
II. Could reasonably be expected to have been
obtained and taken into account in the
preparation and presentation of those
financial statements
3 Ex- effects of mathematical mistakes, mistakes
in applying accounting policies, oversights or
misinterpretations of facts, and fraud
Change in estimates
Will be prospective treatments
It is an adjustment of the carrying amount of an
asset or a liability, or the amount of the
periodic consumption of an asset, that results
from the assessment of the present status of,
and expected future benefits and obligations
associated with, assets and liabilities.
Occur mainly
New information or new developments
and, accordingly are not correction of
errors.
 26th April, 2017, Session 5
1. Expense can be negative excess provision returned back
2. Depreciation starts from ready for usage and not from put to use
Ex
o Truck is assembled and purchased but you dont use for 6 months. The day you get the truck
depreciation starts.
o For building When it starts making this will be capital WIP.
All livestock such as cow, human appreciate for some time and then go down
3. Interest is revenue expense. Only interest for building is used for capital WIP.

Income TAX
4. All taxes whether paid or not are mentioned as advance tax
5. Tax Paid (named as Advance Tax) in following ways
a. In every quarter (June, Sep, Dec, Mar)
Cash Decreases, advance tax increases
b. Tax deducted at source
Cash decreases, advance tax increases
6. For a company tax is paid 3 times
a. Advance Tax while deriving PBT from PAT
b. Tax deducted at source
c. Tax on Share dividend

Manufacturing Process

Raw Factory Finished Customer

Material Godown
Store
1. Raw Material 2. All 3. C.O.G.M = 4. C.O.G.S = Opening stock of
consumed = Op. stock conversion Opening stock of FG + Direct purchases of FG
of RM consumed + costs WIP + Closing stock of FG
Purchase of RM (Labor + Conversion cost
Closing stock of RM Factory heads) Closing stock C.O.G.S = Cost of goods sold
Abnormal loss of WIP FG = Finished Goods

Abnormal loss It is considered as an expense and doesnt figure out in COGS- hence it has to be
removed

Conversion Cost a) Labor Costs b) Factory Overheads such as power, fuel, energy c) depreciation of of
machinery and factory building & amortization of patents All costs pertaining to factory and not office.
So administrative cost will not be covered in conversion costs
Share Premium and Bonus shares
7. Share capital 1000; Reserves and surplus 99000 Capital with owners equity is high
The company goes to bank and gets debt of 1 lakh basis the capital and then distribute the reserves
and surplus among share holders
8. If company wants to give bonus shares (ex Mr. X has 10 shares of Company Y, Y wants to give bonus
10 shares) then Share capital will increase by 10 and Reserves & surplus will reduce by 10.
9. Company cannot reduce share capital. This is the most difficult or next to impossible thing to do
given the approval across different or all shareholders and stakeholders

1st May 2017 DRL CASE

Income Tax
1. Advance Income tax is in asset and provision for tax is in liability
2. Advance Income Tax Tax paid to government in the start of any financial year
3. Provision for Tax Tax anticipated by company in the end of year. This may vary from advance
income tax, as this is more realistic given the extra time to judge the same
4. Keep assets and liabilities/owners equity different while closing income tax of any given year

3 entries to explain

Balance sheet of last year

a) Provision for tax (2011-12) 2200
b) Advance income tax (2011-12) 2500

Transaction current year

a) Assessed tax was 2300

Asset Advance tax (-200); Cash +200 Net Advance tax 2300
Liability Provision for tax (+100); expense +100 Net provision for tax 2300

When both are same cut off with following transaction cash+200; expense +100

5. COGS (Cost of goods sold) It is an expense

6. Gross revenue indirect taxes = Net revenue; NR Direct taxes = PBT
7. SGA (Sales and general administration) covers all ancillary expense

# Advance Tax Provision for Tax

1 + Quarterly payments
+ IT return time payment
+ TDS
- Refund from IT assessment when
advance tax > actual
+Additional tax if Assessment > Advance
+ % of taxable income at the end of the year
- Refund from IT assessment when provision
> actual
+ Additional Provision if IT assessment
 tax

Once these adjustments are made these 2 amounts will be netted out and wont appear in Balance
Sheet. The extra allocation will only show up in expense side as an increase or decrease.

8. Liquidity is not just you realize cash but also have a known the exact amount
9. Indirect method is only for operational activities. Financial and investment is totally direct

Learnings from Quiz 1

1. Advance rent is an asset not expense
2. Income Tax Expense
a. Income tax expense is shown below the PBT as i) Tax (current year) ii) Tax last year
b. Income tax expense of last year is also shown below PBT
c. PBT Income tax expense of current year & last year = PAT
3. Dividend
a. Net Profit (PAT) Proposed dividend = Retained earning
b. Dont do duality of dividend (1. Cash or Accounts payable increase & 2. net profit decreases
by dividend)
c. Dividend is not expense It is after profit
d. The moment you declared dividend It moves to dividend payable
4. Retained earnings = PAT Proposed dividend; PAT = PBT Income tax expense of current year and
previous years. Retained earnings is taken to Liabilities.

2nd May 2017 Cash Flow statement

1. Reserves and Surplus is part of shareholders money

# Available for shareholder Not available for shareholder

Share premium is not available for shareholder

2. Excise duty is paid in advance. Any company keeps advance account with excise duty

Statement of Cash Flows: Three examples

#
1 Operating Activities
2 Investing Activities
3 Financing Activities
Shows the inflows and outflows related to the fundamental operations of the basic
line or lines of business that the company is in
Shows cash flows for the
1. purchase and sale of assets not generally held for resale and
2. for the making and collection of loans
Shows the cash flows associated with increasing or decreasing the firms financing
 # Operating Activities
1 Cash receipts from the sale
of goods or services
2 Cash outflows for
purchasing inventory
3 Paying wages, taxes and rent
Investing Activities
Sold a building
Purchased equipment
Made a loan to a subsidiary
Purchased a piece of equity in
its supplier
Financing Activities
Issuing or repurchasing stock
Borrowing or repaying loans
Dividends

CFO Cash flow from operations CFI Cash flow from investing CFF Cash flow from financing

Sources Operations or financing? Asset disposal/sale of Financing equity or debt

operations?
Uses CAPEX Dividend or buy back Repayment of debt
Take-away 1. CFO : Negative or positive 1. Investment in Excess cash : 1. Borrowings
Key Trends to 2. CFO vs NI Fixed Assets or purchase - Net repayment or new
see 3. Changes in working capital of business borrowings
4. Sale of Assets Profit or loss 2. Investment in Fixed - Long term or short term
5. CFO vs CAPEX Assets : Expansion or 2. Financing pattern
6. CFO vs CAPEX + Dividend replacement - Equity or debt
3. Sale of assets / sale of - Public offers
operations - Net borrowings or
repayments
- Dividends / Buy back

CFO
# Direct Indirect
1 Normal Net income is adjusted for all noncash revenues and expenses, one of which is depreciation.
process No Depreciation is never a source of cash, but it is deducted to compute net income, so it must
change be added back

2 Most of the statements are indirect method. Reason for this is that if the direct method is
used, a reconciliation of income to cash flows from operations is also required, so most
companies simply use the reconciliation as their summary of cash flow from operations

Construction Contracts
1. Determining stage of completion
a) Cost of method
Percentage completed = Cost Incurred / Total Estimated project cost; where
Total Estimated project cost = Cost incurred + Cost to incur
 b) Physical progress method gives completion of physical proportion of the contract work
c) When the outcome of a construction contract cannot be reliably estimated
Revenue = Contract costs (i.e. no profit)
Expected future loss -> to be recognized immediatedly
2. P&L post determining stage of completion
a) Cumulative revenue = % completed * Fixed contract costs
b) Cumulative cost = % completed * Total estimated project cost
c) Revenue of the year = Cumulative revenue till this year cumulative revenue till last year
d) Expense of the year = Cumulative expense till this year Cumulative expense till last year
e) Gross profit = Revenue of the year Expense of the year
f) Provision for future losses = Expected future loss Op. balance of provisions
Expected future loss = (Fixed contract cost Cumulative revenue) Cost to complete (as stated)
In expected future loss, we take only cost to complete as mentioned in the note

3. BS post determining stage of completion

# More Less Type Name

1 Actual Cost Incurred - Cost recognized = Asset Contract WIP
2 Cost Recognized - Actual cost incurred = Liability Un-incurred cost
1 Actual cost incurred - Cost paid = Liability Accounts payable
2 Cost Paid - Actual cost incurred = Asset Advance to supplier
1 Revenue - Billings = Asset Unearned revenue
2 Billing - Revenue = Liability Unbilled revenue/
Unbilled receivables
1 Billings - Cash Received = Asset Accounts
receivable/Retainage
2 Cash received - Billings = Liability Advance to customers

Individual Assignment 3
1. Investing, financing, operating

# Investing Financing Operating

1 Purchase of land Issue of shares Tax & rent
Purchase of machinery Payment of loan Purchase of inventory,
Sale of Investment Repayment of loan stationery Current
Sale of old car New loan assets
Dividend payment
Interest payment

Ratios
1. Interest Coverage Ratio

Going concern Check Are you repaying the interest/installments from profits or new loans?
= PBIT / Interest or PBIT / (Interest + Installments due in next month)

2.

Turnover ratio : Top mein sales Margin/ Ratio bottom mein sales
Sales / (____) (____) / Sales

2. Debtors/ Receivables turnover ratio = Sales / (Avg. debtors = Accounts receivables)

3. Days receivable = 365 / (debtors or receivables turnover ratio)
4. Inventory turnover ratio = COGS / Avg. inventory
5. Days inventory = 365 / Inventory turnover ratio
6. ROE = PAT / Equity
7. ROIC = {PBIT(1-Taxrate)} / (Capital = long term liabilities + shareholders equity)
8. ROA = {PBIT(1-Taxrate)} / Assets
9. Debt-ratio or Debt Capitalization = Debt / (Debt + Equity)
10. Debt-equity ratio = Debt / Equity
11. DuPont Linking
ROE = PAT / Equity = Profitability ratios * Efficiency ratios * Leverage (assets/equity)
ROE = Operating ROA + [Financial leverage * Spread]

Trends from Cash flow statement

1. Major sources of cash & Major uses of cash
2. Compare Cash flow from operations with

# Different parameters
1 Net Income
2 Capital expenditures (PPE, depreciable assets)
3 Capital expenditures (PPE, depreciable assets) + Dividends

3. How did the firm invest its excess cash

4. Sources of cash the firm used to pay for the capital expenditures and/or dividends
5. Working capital (current assets current liabilities) accounts other cash and cash equivalents
Primary sources of cash, or users of cash
Working capital is +ve Source of cash
Working capital is ve Use of cash
6. Major items affecting cash flows

Trends
#
1 Net Income
2 Cash flow from (continuing) operations
3 Capital expenditures
4 Dividends
5 Net borrowing (proceeds less payments of short and long-term debt)
 6 Working capital accounts

7. Was cash flow from operations greater than or less than net income
8. Cash flow from operations > Capital expenditures (PPE)
Capital Expenditure = PPE, Investment in depreciable assets, Purchase of PPE
9. Cash flow from o

Amortization & Capitalization

# Amortization Capitalization
1 It is an expense; similar to depreciation expense Capitalization is asset
2 Amortization is the value for one year and is not
carried forward as it is part of P&L statement