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Premiun on redemption of preference share & securities premi

Sandip Sadhukhan (Student) (40 Points)

02 December 2015

I have a dobut please anybody solve it,

Redemption of preference share of ₹ 1000 ( including premium of ₹200)

1.4.2015 Issue of share for redemption of ₹ 500 ( including premium of ₹100)

Securities premium of ₹ 100 ( which issue 1.4.2015) can adjust against premium on redemption of preference share .

Thank you,

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GANESH MAHADEO UPALKAR (ARTICLED ASSISTANT) (256 Points)
Replied 03 December 2015

As Per Companies Act.2013

Redemption premium can be written off as follows:

Redemption Premium by	Can be paid Out of
Prescribed type of companies having Accounting standard compliance	Profits only
Other companies	Profits or Securities Premium

Note: No such distinction is there is CA 1956

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Sandip Sadhukhan (Student) (40 Points)
Replied 03 December 2015

Sir, I understand that
I have another question
premium on issue of new share which issue for redemption of preference share can adjust against premium on redemption of preference share?

Corporate accounting by "hanif and mukharjee" says that it is not possible but other author silent this point.

Please help, thank you)

Attached File : 1335019 20151203204320 untitled.doc downloaded: 142 times

GANESH MAHADEO UPALKAR (ARTICLED ASSISTANT) (256 Points)
Replied 04 December 2015

Yes it can be done but if there is no securities premium then POR(Premium on Redemption) should be adjusted against balance in general reserve and then against balance in P/L A/c

For reference see tulsian book solved question

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