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    What Is Net Capital?

    2011/1/30 14:13:00 357

    Net Capital Accounting


    Net capital refers to the deduction of core capital plus subsidiary capital.

    Subtraction

    The value.

    For banks, net capital is available.

    Regulations

    The core capital can not be less than 50% of the net capital, and the subsidiary capital can not be higher than the 100%. of the core capital.


    Calculation formula of net capital


    For banks: net capital = core capital + subsidiary capital - deduction


    Among them, the subsidiary capital = revaluation reserve + general preparation + long-term secondary debt;


    The deduction includes: goodwill, capital investment to the unlisted bank institutions, and unlisted assets.

    Bank

    Capital investment of financial institutions, investment in non self employed real estate, capital investment in industrial and commercial enterprises, and loan loss preparations have not yet been fully mentioned.

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