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Share premium

Lalwani Mahesh Girdharilal (Student) (24 Points)

25 September 2013

Why share premium not realised i cash can't be used for bonus issue?

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2 Replies

Mr.C.A (ipcc) (173 Points)
Replied 28 September 2013

Definition of 'Share Premium Account' Usually found on the balance sheet, this is the account to which the amount of money paid (or promised to be paid) by a shareholder for a share is credited to, only if the shareholder paid more than the cost of the share.
	Investopedia explains 'Share Premium Account' The share premium account may be used to issue bonus shares, write-off equity related expenses like underwriting costs, etc.

Mr.C.A (ipcc) (173 Points)
Replied 28 September 2013

for example 100 equity shares @ r.s 10 , people applied full with premium 2

100 x 2 = 200 is the share premium amount which you can utilize for issue of Bonus shares or else for partly shares to make fully paid shares...........

for more details

https://www.investopedia.com/terms/s/sharepremiumaccount.asp

hope it helped :D take care