top button
Flag Notify
    Connect to us
      Facebook Login
      Site Registration Why to Join

Facebook Login
Site Registration
Print Preview

How does a share premium account appear on a balance sheet?

+1 vote
posted Jun 15 by Shubham Rajput

Share this question
Facebook Share Button Twitter Share Button Google+ Share Button LinkedIn Share Button Multiple Social Share Button

1 Answer

0 votes

Share premium account shows up in the shareholders’ equity portion of the balance sheet.
The share premium account represents the difference between the par value and issue price. For example, say a company issued 1,000 shares at ₹10 par value per share. The company actually received ₹15 per share as the subscription price. The difference between the par value and the subscription amount is the share premium. Thus, the additional ₹5,000 is placed in the share premium account.
The company may use share premium for following purposes
1.Bonus shares
2.Writing off : Writing off expenses of "commission paid,discount allowed and preliminary expenses"
3.Buy-back : Purchasing its own shares

answer Jun 15 by Sumeet Vyas
Contact Us
+91 9880187415
#280, 3rd floor, 5th Main
6th Sector, HSR Layout
Karnataka INDIA.