12 June 2020
As we write off intangible and fictitious assets in internal reconstruction. We have to write it off whether it is given or not? And also about patents, while solving problems I came across 1 adjustment in which balance of capital reduction is utilised for writing down patents. And the given amount is 6000 and balance amount is 4000. And the remaining 2000 is considered in the balance sheet after reconstruction. Why?? What's the reason for it??
09 August 2020
Because not all the balances have been set off with Capital Reduction Account...
The Capital Reduction Account is a temporary account opened in order to carry out the internal reconstruction. When the scheme is carried out, the account is closed. The Capital Reduction Account represents the sacrifice made by the Shareholders, Debenture-holders, Creditors etc.
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