Dear Member,
In our company, 99% shares are held by promoters and balance 1% shares are held by Public Share Holders. Recently company received court sanction for reduction of share capital authorising company to extinguish non promoters share ca[ital by paying off fair value to shareholders.
Company's shares are of Rs. 10/- each and fair value is worked out @ Rs. 50/-. In Companies books of accounts, Company is having balance in Capital reserve account, general reserve account and share premium account.
I would like to understand accounting treatment of premium or additinal payment of Rs. 40/- which is being made to share holders. Whether it needs to be charged to P&L account or adjusted against general reserve or capital reserve or share premium account?
Regards
CA Chandrashekhar Laddha
+91 99252 37250
CAclubindia
