I am facing question while preapring for group 2 and somehow someone replies me so i am able to clear my doubt.
Again one question from the chapter internel reconstruction.
If shares are issued for other than cash then it should be disclosed in b/s while preparing after internel reconstruction.
so my question is when shares are issued for a consideration other than cash? and why the company issued to same,in which condition and why?
Shriram Ramachandran
(IPCC Student CWA Inter & Processing officer in GNSA Infotech Ltd)
(492 Points)
Replied 24 April 2011
Hi Pujit
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when shares are issued for a consideration other than cash? If a company buys a Fixed Asset instead of paying them by cash the can issue share for the cost of the asset. why the company issued to same Normally company will not issue like that if Party is willing it will issue. in which condition? When both Company & the 3rd Party (Creditors) accepts then only the Company can issue shares for them. Why? If Company issue share instead of paying the Companies Liquidity will be more as there is no out flow of Cash or Bank. |
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Thanks
R Shriram
CAclubindia
