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3 tests for buyback

Accountancy

Just a quick question. In the attached problem, the securities are bought back at Rs.30. Rs.10 is F.V and the rest is premium on bb. While calculating the third test we are allowed Rs 150cr to buy back, but Sir is splitting this between CRR creation and buyback as a total of Rs. 40 for one share. So if we are allotting Rs.10 to CRR the rest for bb should be Rs.20 right? Why is he taking it as Rs. 30 for bb and Rs.10 for CRR?

Sri Murthy

CMA Inter

★ 0

22-Nov-22 22:52

751

Answers (2)

Out of total funds we will use rs10 to CRR and rs30 to Buyback so Total fund rs 40 for each share buyback

Attachments

R Yashwanth Kumar

CA Final

★ 87K+

23-Nov-22 00:29

30 - Buy back value 10 reduces share capital 20 reduces reserves And further 10 is transferred from free reserves to CRR

CA Suraj Lakhotia

Admin

23-Nov-22 19:01