STUDY TO ENLIGHTEN YOURSELF
MEANING Internal Reconstruction is also known as Capital Reduction. Section 66 of the companies Act governs the internal reconstruction. A company resorts to internal reconstruction or capital reduction only in exceptional circumstances. Internal reconstruction result in the reduction of the capital of the company. CONDITIONS/ PROVISIONS REGARDING INTERNAL RECONSTRUCTION AUTHORISATION BY ARTICLES OF ASSOCIATION The…
ALTERATION OF SHARE CAPITAL Alteration of Share Capital refers to the changes in the existing capital structure of the firm. A company can alter its share capital only if it is authorized by its Articles of Association. An article of association is the document framed at the time of incorporation of the company to govern…
Read More “ALTERATION OF SHARE CAPITAL – CORPORATE ACCOUNTING- DETAILED NOTES 100%” »
PURCHASE CONSIDERATION Purchase Consideration refers to the payment made by the transferee company to the transferor company for the business taken over. It includes all types of payments made in the form of the shares, securities, bonds or cash etc. ACCORDING TO ACCOUNTING STANDARD 14 “The aggregate of shares and other securities issued and the…
MEANING Amalgamation is a process in which the companies liquidate to create a new company, which takes over the business of liquidating companies. Accounting Standard 14 issued by the Institute of Chartered Accountants of India deals with the accounting for amalgamation. EXAMPLE: If A Ltd. And B Ltd. Are taken over by a newly formed…
DISTRUST OF STATISTICS Distrust of statistics means lack of confidence in the statistical methods and statements. As statistics suffers from various limitations, that is the reason statistics become a thing of distrust. ACCORDING TO YULE AND KENDALL “Statistical methods are most dangerous tools in the hands of an inexpert.” The following are the points that…
LIMITATIONS OF STATISTICS Undoubtedly, statistics has universal applicability, but there are also some facts which prove as limitations of statistics. ACCORDING TO NEWSHOLME “Statistics must be regarded as an instrument of research of great value but having severe limitations which are not possible to overcome and as such need our careful attention.” The limitations…
MEANING Divisible Profits are the profits that are legally available for distribution among the shareholders by way of dividend. These are the profits which the directors consider should be distributed after making provision for past losses and reserves. LEGAL RESTRICTIONS UNDER SECTION 123 (1): As per this section, the payment of dividends can be made…
BALANCE SHEET AS PER COMPANIES ACT 2013 Balance sheet is a statement of financial position of a company at a specified moment of time. It shows the company’s assets on one side and company’s liabilities on the other side. It tells about the solvency, profitability and liquidity position of the firm. Section 129 of the…
The difference between Departmental and Branch Accounting is as follows: DEPARTMENTAL ACCOUNTING Departmental Accounting refers to maintaining accounts for one or more departments of the company. Revenues and expenses of the department are recorded and reported separately. The departments are then consolidated into the accounts of the head office to prepare the financial statements of…
Read More “DIFFERENCE BETWEEN DEPARTMENTAL AND BRANCH ACCOUNTING” »
INCORPORATION OF BRANCH TRIAL BALANCE Branch and Head office belongs to the same owner. It is must to prepare the consolidated accounts of both. To prepare the consolidated accounts of the head office, the branch trial balance is incorporated in the books of the Head Office. The Incorporation of Trial Balance means the recording or…