Issue of Debentures Notes6

Study Material & Notes for the Chapter 9

COMPANY - ISSUE OF DEBENTURES

VI.  WRITING OFF DISCOUNT/LOSS ON ISSUE OF DEBENTURES

  1. Discount or Loss on issue of debentures is a capital loss and is written-off in the year it is incurred i.e. in the year debentures are allotted.
  2. Discount or loss is written-off from the following:
    • From Capital Reserve
    • From Securities Premium Reserve [section 52(2)]
    • From General Reserve
    • Against revenue profits of the year
debenture issue 6_1.1