What to utilised 1st for redemption of Preference shares?
Genral Reserve OR profit and loss a/c in balance sheet
Faiz Ahmed
( Article Trainee)
(1731 Points)
Replied 28 August 2010
There is no such restrictions between the two.
Redemption of preference shares can be done out of any free reserves( available for distribution and unutilised in the B/S). Both G/R & P&L(Cr. balance) are free reserves. If redemption premium is talked about, then first Securities Premium is to be utilised (if any in B/S)
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