Information required to be furnished in terms of clause (e) to notes appended to form of balance-sheet prescribed in the Schedule - Companies Law - Letter No. 28/1/71-CL-V,

Circular : Letter No. 28/1/71-CL-V, dated 13-10-1976. Subject:-Balance-Sheet - Form of - Information required to be furnished in terms of clause (e) to notes appended to form of balance-sheet prescribed in the Schedule In cases where the capital account of each partner is maintained at a constant figure, or in other words where the capital of the partner is fixed, this should be shown under Investment . Similarly, in other cases where the capital is not fixed or not specified by the partnership deed, if any, and all transactions between the partner and the firm are merged in a single account in the books of partnership firm, the total of such account should be shown under the Investments and not under the Current Assets, Loans and Advances . In other words, the net amount standing to the credit of the partner (i.e., aggregate of capital, profits, deposits, if any, etc., as reduced by share of loss, if any, and drawings of the partners) should be shown under the head Investments and not under the head Current Assets, Loans and Advances . As regards the disclosure of total capital of the partnership firm, the same may be preferably shown as on the date of the balance-sheet of the company. Where, however, the capital of the firm fluctuates from day to day, and the accounts of the firm and the company are closed on different dates, the same may be exhibited in the balance-sheet of the company as per the last authenticated balance-sheet of the firm. One of the requirements is to disclose the share of each partner in the balance- sheet of the company. This point is not free from doubt as it can mean either the share of each partner in the capital of the firm or share of each partner in the profit of the firm. It is, however, felt that the preferred interpretation is to disclose the share of each partner in the profit of the firm rather than the share in the capital since, ordinarily the expression share of each partner is understood in this sense. Moreover, disclosure is already required of the total capital of the firm as well as of the company s investment in the capital. Nothing further will, therefore, be gained by disclosing the share in the capital. Disclosure relating to the share of each partner in the profits of the firm would enable the company s shareholders to ascertain the extent of the company s involvement in the firm.