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Presentation On Redemption Of Preference Share

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Published in: Accountancy: Tax
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Abdul R / Dubai

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  1. UNIT 11 REDEMPTION OF PREFERENCE SHARE CAPITAL By Prof. Abdul Rahim Rehman
  2. INTRODUCTION QRedemption is the process of repaying an obligation, at prearranged amounts and timings. It is a contract giving the right to redeem preference shares within or at the end of a given time period at an agreed price.
  3. METHODS OF REDEMPTION OF FULLY PAID REDEEMABLE PREFERENCE SHARES QR[A] BY FRESH ISSUE OF SHARES Q [B] BY DIVISIBLE PROFIT Q [c] BY COMBINATION OF BOTH FRESH ISSUE OF SHARES AND DIVISIBLE PROFIT
  4. OPTIONS AVAILABLE FOR REDEMPTION QR[AI AT PREMIUM (More Than Face value) Example FV = 10, 12. AT DISCOUNT (Less Than Face value) Example FV = 10, 08. QR[C] AT PAR (Equal to Face value) Example FV = 10, UO.
  5. SOURCES FOR REDEMPTION CR[A] FACE VALUE = FRESH ISSUE OF SHARES + DIVISIBLE PROFIT a [B] PREMIUM ON REDEMPTION = PROFIT AND LOSS a/c (as per the company act 2013 section 133)