Question

........... reconstruction, the accumulated trading losses and fictitious assets are written off.

Answer 1

During a **financial reconstruction**, the accumulated trading losses and fictitious assets are written off. This process typically involves restructuring the company’s balance sheet to reflect a more accurate financial position, thus eliminating any over-inflated or non-existent assets and acknowledging past trading losses explicitly. This helps in creating a solid foundation for the company's future financial health and operations.