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Issue of bonus shares out of capital profit

V Devaraj Rao (Asst. Manager - Finance) (84 Points)

28 May 2018

Can anybody advice the situations where a Company can issue bonus shares out of capital profits ?

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5 Replies

manish tejwani (1608) (61 Points)
Replied 28 May 2018

not allowed only security premium and balance of p&l is permitted

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Aditi (Student) (389 Points)
Replied 28 May 2018

bonus issue can be made from genuine profita only which are actually earned. capital profit arises on account of profit on sale of asset and hence it can be utilised . but profit on revaluation of asset which is not actual cant be utilised .

Deepen (Company Secretary) (144 Points)
Replied 28 May 2018

Even securities premium account is treated as capital in nature. Correct me if I am wrong.

Aditi (Student) (389 Points)
Replied 28 May 2018

yes, and it is actual profit realised so it is also used for bonus issue

srikumar (audit staff) (1203 Points)
Replied 02 September 2018

accumulated profit take consideration for issue if bonus shares

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Issue of bonus shares out of capital profit

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