Journal Entries For Giving Effect To The Capital Reduction Scheme bj3i

Journal Entries for giving effect to the Capital Reduction Scheme: (i) When denomination of Shares is not reduced; only paid up value is reduced–

(iv) For Sacrifice made by Debentureholders, if any;

(v) For Sacrifice made by Creditors, if any:

(vi) For recording any increase in the value of Assets (on Revaluation):

(vii) For recording decrease in the value of liability:

(viii) For making any Provision for Contingent Liability:

(ix) Capital Reduction is used for writing off various accumulated losses, fictitious assets and loss on assets and liabilities and the journal entry is–

LET US KNOW The amount to be written off cannot exceed the amount credited to Capital

Reduction . But if there is any reserve in the liabilities side of the balance sheet, the same may be utilised in writing off accumulated losses and fictitious assets. After writing off various assets, if any balance is left in the Capital Reduction , the same will be transferred to Capital Reserve . 1. The words ‘‘And Reduced’’ should be added to the name of the company, if the National Company Law Tribunal (NCLT) so directs. 2. The amount written off in respect of fixed assets under a scheme of reconstruction must be shown in the Balance Sheet for five years after the date of reduction. 3. After completion of the ing process the Capital Reduction should not show any balance.