CA Foundation · Accounting · Company Accounts
As per Schedule III (Division I) of the Companies Act, 2013, under which head of the Balance Sheet would 'Securities Premium' be shown?
Securities Premium is shown under Shareholders' funds as part of Reserves and Surplus. It is an amount received above face value of shares and belongs to owners, so it is neither share capital proper nor a long-term or current liability under Schedule III.
- ANon-current liabilities - Long-term provisions
- BShareholders' funds - Reserves and SurplusCorrect
- CShareholders' funds - Share capital
- DCurrent liabilities - Other current liabilities
Explanation
Schedule III requires Securities Premium to be disclosed under 'Reserves and Surplus', which is part of Shareholders' funds. It is not share capital because it is the amount received over the face value of shares. It is also not a liability payable to outsiders.
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