Question

what do you mean by redemption of preference shares? desribe tha provisions and rules regarding redemption of shares with accounting treatment

Answer 1

Answer:

==>Mandatory Requirements

These shares shall be redeemed only out of the profits of the company which would otherwise be available for dividend or out of the proceeds of a fresh issue of shares made for the purposes of such redemption. These shares shall be redeemed only when they are fully paid.

Explanation:

==>Redemption of preference shares means returning the preference share capital to the preference shareholders either at a fixed date or after a certain time period during the life time of the company provided company must complied certain conditions.

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