PPT - Redemption of Preference Shares CA Foundation Notes | EduRev

Fundamentals of Accounting for CA CPT

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CA Foundation : PPT - Redemption of Preference Shares CA Foundation Notes | EduRev

 Page 1


CPT Section A Ch. 9 Unit 3 Fundamentals of 
Accounting 
CA SK Chhabra 
Page 2


CPT Section A Ch. 9 Unit 3 Fundamentals of 
Accounting 
CA SK Chhabra 
Meaning 
•Repaying the capital back to the 
preference shareholders at an 
agreed amount on agreed date 
Page 3


CPT Section A Ch. 9 Unit 3 Fundamentals of 
Accounting 
CA SK Chhabra 
Meaning 
•Repaying the capital back to the 
preference shareholders at an 
agreed amount on agreed date 
It should be authorised by the Articles Of Association of the 
company 
Redemption should be only of  fully paid shares 
Sources used for redemption can be 
•Fresh proceeds of new shares 
•Divisible profits 
Page 4


CPT Section A Ch. 9 Unit 3 Fundamentals of 
Accounting 
CA SK Chhabra 
Meaning 
•Repaying the capital back to the 
preference shareholders at an 
agreed amount on agreed date 
It should be authorised by the Articles Of Association of the 
company 
Redemption should be only of  fully paid shares 
Sources used for redemption can be 
•Fresh proceeds of new shares 
•Divisible profits 
Premium on redemption can be out of 
• Securities premium 
• Divisible profits 
Capital Redemption Reserve equal to face 
value of shares redeemed should be created 
reduced by any fresh issue of share capital 
Page 5


CPT Section A Ch. 9 Unit 3 Fundamentals of 
Accounting 
CA SK Chhabra 
Meaning 
•Repaying the capital back to the 
preference shareholders at an 
agreed amount on agreed date 
It should be authorised by the Articles Of Association of the 
company 
Redemption should be only of  fully paid shares 
Sources used for redemption can be 
•Fresh proceeds of new shares 
•Divisible profits 
Premium on redemption can be out of 
• Securities premium 
• Divisible profits 
Capital Redemption Reserve equal to face 
value of shares redeemed should be created 
reduced by any fresh issue of share capital 
Based On Rights To Dividends 
Based On Redemption 
Based On Participation In Profits 
Based On Convertibility 
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