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Accounts debentures
Accountancy
can anyone explain the four lines which are given in the colour box I did not understanding what they are saying ?? Anyone explain me
Answers (6)
Where a company issues shares at a premium, whether for cash or otherwise, a sum equal to the aggregate amount of the premium received on those shares shall be transferred to a â??securities premium accountâ?? and the provisions of this Act relating to reduction of share capital of a company shall, except as provided in this section, apply as if the securities premium account were the  paid-up share capital  of the company. (2) Notwithstanding anything contained in sub-section (1), the securities premium account may be applied by the companyâ?? (a) towards the issue of unissued shares of the company to the  members of the company as fully paid bonus shares; (b) in writing off the preliminary expenses of the company; (c) in writing off the expenses of, or the commission paid or discount allowed on, any issue of shares or debenture  of the company; (d) in providing for the premium payable on the redemption of any redeemable preference shares or of any debentures of the company; or (e) for the purchase of its own shares or other  securities  under section 68. (3) The securities premium account may, notwithstanding anything contained in sub-sections (1) and (2), be applied by such class of companies, as may be prescribed and whose  financial statement  comply with the  Accounting Standards  prescribed for such class of companies under section 133,â?? (a) in paying up unissued equity shares of the company to be issued to members of the company as fully paid bonus shares; or (b) in writing off the expenses of or the commission paid or discount allowed on any issue of equity shares of the company; or (c) for the purchase of its own shares or other securities under section 68.
Shankari C
The premium on securities will be credited to Securities premium account always. Debenture comes under the definition of securities.The same restrictions on usage of sec.premium a/c will apply to debenture premium also
So whenever the premium on shares will be credited with sec premium. Same way deb on sec premium will be also credited with sec premium am i crt. sister??