Free reserves

This query is : Resolved

Share Report Follow Query Ask a Query

rushi shah

rushi shah (Querist)
Follow

31 December 2013 Is any other kind of free reserves except profit and loss account and General reserve??

Guest

Guest (Expert)

31 December 2013 Free reserves are those reserves upon which the company can freely draw. There is no specific purpose for these reserves. Free reserves can be used by the company to declare dividends, to issue bonus shares, to write off accumulated losses and to write off share issue expenses.
For example, general reserve is a free, voluntary, revenue reserve.

CA Pallav Singhania

CA Pallav Singhania (Expert)
Follow

31 December 2013 Yes it is considered. as per section 372A (b) "free reserves" means those reserves which, as per the latest audited balance sheet of the company, are free for distribution as dividend and shall include balance to the credit of the securities premium account bat shall not include share application money.]

Free reserves are those which are not made for some specified purpose like Debenture redemption reserve of revaluation reserve.

P&L A/c is a free reserve and so the surplus standing to it will be considered for loan purpose under section 372A of the Companies Act.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now

Similar Resolved Queries

Unanswered Queries

Popular
Recent

Trending Online Classes

Direct Tax Laws & International Taxation May 26,Sept 26 & Jan 27

CA Arvind Tuli

Enroll Now
Audit Fast Track Recorded Batch For May 26,Sept 26 & Jan 27

CA Aarti Lahoti

Enroll Now
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English

CA Bhanwar Borana & CA Shubham Keswani

Enroll Now

view all classess

Meet our CAclubindia PRO Members

George Innocent

SUBHASH SAHA

Narendra

Krishnaveni karur

KRK

Subscribe Now

Free reserves

Similar Resolved Queries

Trending Online Classes

Meet our CAclubindia PRO Members

Quick Links

Browse by Category

Latest Job Openings

Senior Executive

CA Final

Manager- Finance and Compliance

GST CONSULTANCY

GST CONSULTANT

Accountant