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intangible assets

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(Querist)
09 December 2010 Dear All,
A company wants to write off its share premium account against the intangible assets present in its balance sheet.

Can you please guide me whether this is possible under the accounting standards and what is the way?

Regards,
Shraddha.
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Aditya Maheshwari

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Aditya Maheshwari (Expert)
09 December 2010 No the same cannot be used for that purpose.

It can be used only for the following as per Section 78 of Companies Act 1956
(2) The 1[securities] premium account may, notwithstanding anything in sub-section (1), be applied by the company-


(a) in paying up unissued shares of the company to be issued to members of the company as fully paid bonus shares;

(b) in writing off the preliminary expenses of the company;

(c) in writing off the expenses of, or commission paid or discount allowed on, any issue of shares or debentures of the company; or

(d) in providing for the premium payable on the redemption of any redeemable preference shares or of any debentures of the company.
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