1. CPTSuccess Revision Notes – Fundamentals of Accounting Chapter 9. Company Accounts Unit 3: Redemption of Preference Shares

3. Whenever fully paid preference shares are redeemed, then the face value of such shares should be replaced either by issue of new equity shares or by transfer of an amount to capital redemption reserve or by both in part. It is also to be noted that when shares are issued at a discount, then replacement is regarded as equal to net proceeds only.

4. Redeemable preference shares are to be redeemed within maximum 20 years and no company is allowed to issue irredeemable preference shares or redeemable preference shares which are payable after 20 years.© Revision Notes - Fundamentals of Accounting CPTSuccess www.cptsuccess.com

6. In paying up un-issued shares of the company to be issued to members of the company as fully paid bonus shares

7. In writing off the preliminary expenses of the company

8. In writing off the expenses of, or the commission paid or discount allowed on, any issue of shares or debentures of the company; or

9. In providing for the premium payable on the redemption of any redeemable preference shares or of any debentures of the company

10. Capital redemption reserve and Securities premium account can be used for bonus issue purposes© Revision Notes - Fundamentals of Accounting CPTSuccess www.cptsuccess.com

11. CPTSuccess