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Disclosure of Share Capital

Is increase i...

Question

Is increase in share capital due to bonus issue shown in cash flow statement?

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Solution

No, since it is just a capitalisation of profit, hence it does not result into any cash inflow or outflow.

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Similar questions

Q. Consider the following statements:
1. The bonus shares shall not be issued in lieu of dividend,
2. A company may issue fully paid up bonus shares to its members out of its 'Capital Redemption Reserve Account'
3. A company may not issue bonus shares out of its 'Securities Premium Account'
Which of the above statement/s is are not correct?

Q. ___________ is used to writing off capital losses or issue of bonus shares in case of a company.

Q. XYZ Ltd issues 500000 new ordinary Rs 1 shares at an issue price of Rs 1.50 and makes a bonus Issue of new shares amounting to 50000 Rs 1 ordinary shares. The company also increases its authorized ordinary share capital by 550000 Rs 1 ordinary shares. By how much will the balance sheet ordinary share capital account increase?

Q. Issue of bonus shares out of reserves will result in __________.

Q. Assertion :Under the provisions of new Company Act 2013, a company may issue fully paid-up bonus shares out of its free reserves, security premium account and the capital redemption reserve account. Reason: According to the new provisions of Company Act, 2013, no issue of bonus shares shall be made by capitalising reserves created by the revaluation of assets.

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