The Preparation of the Profit and Loss Segregation Accounts

1. Profit and Loss Segregation Account is provided to show how profit sharing or net loss share to partners.

2. This account is prepared after the preparation of the Profit and Loss Account ie after the net profit or loss of the business is known.

3. The particulars relating to the partner (except the interest on the loan from the partner) shall be shown in the Isolation Account as follows:

(a) salary, allowance, annual shareholder bonus.

(b) interest on capital.

(c) interest on takeout.