Whenever there is redemption of shares and
1:There is no new issue of shares
2:the new issue of shares does not adequately cover the redemption
It is a capital reserve,created out of a revenue reserve,and therefore cannot be used to pay off dividends.
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Capital Redemption Revere is an reserve created when a company buys it owns shares which reduces its share capital. This reserve is not distributable to shareholders and can be used to pay bonus shared issued.
No. CRR should be created out of divisible profits only
Yes it can use any of the capital reserves for the purpose, like Share Premium Account, Capital Redemption Reserve & Revaluation Reserve...
Capital reserve is a reserve created to deal with general, unspecified contingencies such as inflation. It is a fund set aside for the specific purpose and can not be distributed for other uses. Normally it is legally not distributable as dividends to shareholdersReserve Capital is the part of the Authorised capital which is not yet called up
Yes...revaluation reserve is a part of capital reserve.
No
from undistributable profits to shareholders
Capital Redemption Revere is an reserve created when a company buys it owns shares which reduces its share capital. This reserve is not distributable to shareholders and can be used to pay bonus shared issued.
The Capital Redemption Reserve is a fund that secures a creditor. Debenture Redemption Reserve is for the purpose of security payments only.
No. CRR should be created out of divisible profits only
Yes it can use any of the capital reserves for the purpose, like Share Premium Account, Capital Redemption Reserve & Revaluation Reserve...
investment allowance reserve, capital reserve received in cash, security premium received in cash,capital redemption reserve,
When debentures are redeemed out of capital, no transfer is made to general reserve or debenture redemption reserve account. In this method it is assumed that the company has sufficient funds to redeem the debentures. So the profits are not utilised to replace the debentures.It affects adversely to the Working Capital of the company.
After redemption of debentures, debenture redemption reserve is to be transferred to general reserve.
Capital reserve is the amount created to increase in market value of assets at the time of revaluation of assets.
No Debentures can not be redeemed out of capital only. Gov of India and SEBI has indirectly placed restrictions on redemption of debentures. Now it is compulsory to create Debenture Redemption Reserve at-least 50% of the debentures issued.
capital reserve is not a free reserve