Treatment of bonus shares

Viral Kamdar (Service) (49 Points)

21 August 2017  

I have a query regarding bonus issue of shares.

I have 15 shares of a listed company. Recently, the company declared the bonus in the ratio of 1:2, i.e. 1 bonus share for every 2 shares held.

I have 15 shares, and I received the bonus in two components.

First, I receive 7 shares.

At the same time, I also received the amount equivalent to half of the share in my bank account.

What should be the accounting treatment of the money received into my bank? This can’t be treated as dividend. This is not a sale as well, but the money is received into the bank.

Please guide me in this matter. Thanks.