Section 372a of the companies act, 1956.

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Guest

Guest (Querist)

29 March 2012 Dear Sir,
I want to know whether accumulated losses and intangible assets are also reduced from free reserves (i.e.for checking the conditions of 60% of (paid up capital + free reserves) for complying the provisions of Section 372A of the Companies Act, 1956.

Ajay Mishra

Ajay Mishra (Expert)
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29 March 2012 Hi

As per the Explanation given under section 372A, '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 but shall not include share application money. If accumulated losses is available then it will be reduced from free reserve.

Regards

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Guest

Guest (Querist)

30 March 2012 Sir,
I want to know whether intangible assets are also reduced for calculating the free reserves.

Ajay Mishra

Ajay Mishra (Expert)
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30 March 2012 Hi

Generally intangible assets will not be taken into account for free reserve.

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