Mention any one purpose for which SPR can be utilized.
Answers
Answer:
price higher than the nominal value or face value we call it shares issued at a premium. It is quite a common practice especially when the company has a great track record and strong financial performances and standing in the market.
So say the face value of a share is Rs 100/- and the company issues it at Rs 110/-. The share is said to have been issued at a 10% premium. The premium will not make a part of the Share Capital account but will be reflected in a special account known as the Securities Premium Account.
Now, this amount of premium can be called
To write off expenses of issue of shares and debentures, such as commission paid or discount given on the issue of shares. The balance can also be used to provide for the premium that is payable on the redemption of debentures or of preference shares of the company.