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Querist : Anonymous

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Querist : Anonymous (Querist)
23 October 2011 wat abt if company declares bonus shares instead of dividend is it mandatory to provide for depreciation
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CA CS CMA Sanjay Kumar Sareen

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CA CS CMA Sanjay Kumar Sareen (Expert)
24 October 2011 PROVISION FOR DEPRECIATION IS MANADATORY REQUIREMENT FOR THE PAYMENT OF DIVIDEND & NOT FOR BONUS SHARES.

COMPANY CAN ISSUE BONUS SHARES SUBJECT TO CERTAIN CONDITIONS LIKE PARTLY PAID UP SAHRES MADE FULLY PAID UP ETC. BUT NO REQUIREMENT OF DEPRECIATION. THUS COMPANY CAN CAPITALIZE THE PERMISSIBLE PROFITS/RESERVES FOR BONUS ISSUE.

BUT ISSUE OF BONUS SHARES IN LIEU OF DIVIDEND IS NOT PERMISSIBLE .

REGARDS

SANJAY KUMAR SAREEN
FACULTY OF COMMERCE STUDIES,PITAMPURA,DELHI
contactus@focs.in
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