Login  |  Register  |  Forgot Password 
Below Login Ad
All Queries |  Resolved Queries |  Today Queries |  Become an expert Ask Query

Please Help: BUY BACK OF SHARES

Posted Date : 05-Jan-2012 , 01:53:03 pm | Posted By: Deepanshu Goyal

Category : Accounts | Answers : 5| Comments : 2| Hits: 1581

WHY WE ARE CREATING CRR(CAPITAL REDEMPTION RESERVE) AFTER BUY BACK OF SHARE WITH THE NOMINAL AMOUNT OF SHARE BUY BACKED ?

Answers:
   Answer by: Rohit Agarwal
Capital Redemption Reserve (CRR) is created for redemption of Equity and Preference Shares by transferring an amount equal to the amount apportioned from the profit for the year computed under Indian GAAP. Under the Indian Companies Act, 1956 such reserve has a restricted usage and is to be created out of the profits for the year in financial statement prepared under Indian GAAP. Capital Redemption reserve can be utilised for paying unissued shares of the company to be issued to members of the company as fully paid shares.
   Answer by: Mrattunjay
statutory provision
   Answer by: Ketan Samdani
The simple logic to create CRR is to maintain the confidence among the lenders & crediotrs. In case of buy back the owners are withdrawing their own capital from the company. In such situation it is necessary to maintain the confidence among lenders & crediotrs and as such CRR is created so capital remains intact. Also any lender or creditor will ask a simple question that "when owners themselves are drawing their capital in that case why do we give our money to company to do business?
   Answer by: Rambabu Senkarasetti
To protect users of financial statements
   Answer by: Rambabu Senkarasetti
To protect users of financial statements
Comments
Posted By : Ketan Samdani 01-Mar-2012, 12:56:16
With the above logic the statutory provision of creation of CRR was enacted. Hope I have cleared your doubts.
 
Posted By : Deepanshu Goyal 05-Jan-2012, 01:53:48
WAITING FOR ANSWER
 

Search By Categories

More Categories

Hall of Fame for Queries

Name Pic Queries Rank
Rambabu Senkarasetti 569 17
 
Vaneet Gupta 560 12
 
CA Satuti Mahajan 360 27
 
Ashish Karundia 317 13
 
Rishabh Upadhyay 300 23
 

Search Question:

 
 
www.casansaar.com
...keeps you updated

Home

  |  News

  |  Articles

  |  Discussion

  |  CA Firms

 |  Members

 |  CA Community

 |  Jobs

 |  Empanelment

 |  Files

 |  Matrimonial

 |  Students zone

 |  Queries

 |  Classified Ads

 |  Events

 |  About us

 |   Top Members

 |  Coaching Centres

  | Testimonials

 | Judiciary

 | Videos

 | Notifications/Circulars

 | Book

 | eDirectory

 | Interview

 | Website

 | Emails

 | Software

 |  Score Board

 |   Press Release  

 |   Blood Bank  

  |   Opinion Poll  

  |   Feedback
 |   Advertise us

 |   Terms & Conditions

 |   Refund Policy

 |   Contact us
 |   Blog

  |   Sitemap

  |   Auditing

  |   Bank

  |   Bank branch audit

  |   Banking

  |   Black Money

  |   CA

  |   CA Announcement

  |   TDS

  |   Students Zone

  |   Custom

  |   VAT

  |   Service Tax

  |   Corporate Law

  |   General

  |   Excise

  |   SEBI

  |   Finance

  |   GST

  |   ICAI

  |   FEMA

  |   ICWAI

  |   ICSI

  |   DGFT

  |   RBI

  |   IFRS

  |   CAG

  |   Budget

  |   Merger & Acquisitions

  |   International Business

  |   Shares & Stock

  |   Excel Tips

  |   International Taxation

  |   ITR

  |   Chartered Accountant

  |   Tax Audit

  |   Companies Act

  |   Money Laundering

  |   MCA

  |   Income Tax Refund

  |   NPA

  |   Income tax software

  |   CST

  |   CA Exams

  |   CA Results

  |   CBDT

  |   Accounting Standards

  |   DIN

  |   Judical Announcement

  |   MDP

  |   PAN

  |   Whats App

  |   Secretarial Standards

  |   NGO

  |   CA Convocation

  |   Finance Bill

  |   ICAI Notification

  |   CARO

  |   COMPANIES SECRETARY

  |   Accounts

Follow Us : Twitter Icon Facebook Icon Orkut Icon Linkedin Icon Linkedin Icon
Developed By: CASANSAAR Copyright © casansaar

Top Accounting Firms,CA COMMUNITY,CA SANSAAR,Chartered Accountant,Ca Networking Firms,Partner Portal,Ca Assignments,CA,Online Communities For Chartered Accountant,Circle For Ca,CS,CMA and FINANCE,Articles By CA / CS / CMA,accounting news articles,Ca Firms In Delhi,CA ANNOUNCEMENT

accounting jobs,article trainees,best website creator,empanelment,income tax slab, ITR, TDS Chart,budget of india 2014-15,gst,auditing,Income tax,students zone,cpt,community matrimony for ca,Classified Ads,Community Matrimony For Ca,Students Zone,Coaching Classes,Company Secretary,Cost Accountant,Judiciary.