What is Capital Redemption Reserve?? And which amount is transferred to it?
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Accounts doubt (shares)
Replies (5)
capital redemption reserve - This is a reserve which is created at the time of redemption of preference shares. This is shown on the liability side of balance sheet.
redemption of preference shares can be done in 2 ways..
1) out of proceeds of fresh issue of equity shares.
2) from the capital profits.
the amount of capital profits which is used for redeeming the preference shares is subsequently transffered to "capital redemption reserve".
NOTE- SECURITIES PREMIUM CANNOT BE USED FOR REDEMPTION BUT IS UTILISED FOR PAYMENT OF PREMIUM ON REDEMPTION.
Capital Redemption Reserve is to be created when there is redemption of capital (preference)....The amount to be transfered to this reserve is the amount of nominal value of capital that is redeemed using own funds instead of amount out of fresh issue.....
This reserve is utilized only for issuing bonus shares....As i said only nominal value will be transfered....So any premium on redemption will not be transfered....Here own funds means.... General reserve, p&l surplus or any other free reserves which are freely available redemption....
year ended 31.3.2010 rs.800000
" " " " " " " " 31.3.09 rs.1500000
" " " " " " " " " 31.3.08 rs.1800000
31.3.07 rs.400000(loss)
31.3.06 rs.1300000
can u plz explain to me dz calculation ds is a sum of goodwill
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