Shares & Stock

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This query is : Resolved

Srinivas (Querist)

27 November 2008 If the company issue the shares at premium, then we need to show the premium amount in liabilities side of the balance sheet but how do we mention it in the balance sheet and with what name?

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)

27 November 2008
SECURITIES PREMIUM A/C.

Srinivas

Srinivas (Querist)

27 November 2008 thank you sir.

I have another doubt, that is what is the difference between reserve capital and capital reserve?

Srinivas

Srinivas (Querist)

27 November 2008 Sir,

I have gone through your profile its very helpful to me to clarify my doubts could you give me brief idea about welth tax?

Reetika Goel

Reetika Goel (Expert)

27 November 2008 Reserve Capital is that part of Issued capital which can be called up only at the time of liquidation.

For Example,
If you have Authorised Capital of 50,000 shares, out of which you have issued only 30,000 shares Rs.8 called up with a clause that the remaining Rs. 2 can be called up only at the time of Liquidation.
So, this type of reserved capital is called Reserve Capital.
Secondly, this capital NEVER forms PART OF BALANCESHEET.

Capital Reserve
However, capital reserve is that part of profits which have not accrued from the normal course of business.

For Example
When there is restructuring/internal reconstruction or there is purchase of business(amalgamation) then the profit on such adjustment is transfered to Capital Reserve.
These reserves FORM part of BALANCESHEET.

Srinivas

Srinivas (Querist)

27 November 2008 Thank you,

If you dont mind could you give the brief idea about wealth tax?

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