Caadt Inter

SUPPLEMENTARY_PAPER 10_SYLLABUS 2022
Supplementary on Study Material of Paper 10: Corporate

Accounting and Auditing, Edition July 2024
Section A
Corporate Accounting
Module 1: Accounting for Shares and Debentures
Module 1.1 Page No. 10
Ignore the following part
As per Division II of Schedule III of the Companies Act 2013, Paid up Equity Share Capital is to be shown
in the Statement of Changes in Equity as follows:
Statement of Changes in Equity
A. Equity Share Capital

Balance as the beginning of the Changes in equity share Balance at the end of the
current reporting period capital during the current current reporting period
year

Ignore the following part
As per Division II of Schedule III of the Companies Act,2013, Calls in Arrears is to be deducted from the
Paid up Equity Share Capital which is to be shown in the Statement of Changes in Equity as follows:
Statement of Changes in Equity
B. Equity Share Capital

Balance as the beginning of the Changes in equity share Balance at the end of the
current reporting period capital during the current year current reporting period
Called up Share Capital Less
Calls in Arrear

The following part should be replaced:
As per Division II of Schedule III of the Companies Act 2013, Extract of Balance Sheet is to be shown as
follows:
An extract of Balance Sheet as at 30th April 2023 (after bonus issue):
Directorate of Studies, The Institute of Cost Accountants of India (Statutory Body under an Act of Parliament) Page 1
The revised part will be as follows:
An Extract of Balance Sheet as at 30th April,2021 (after bonus issue)
Module 1.1 Section 1.1.4 Page No. 62

In Question No. 2 ‘Securities Premium Reserve’ will be ‘Securities Premium’
Ignore the Question and Solution of ‘Question No. 3’ and consider the revised Question No. 3
and its Solution as follows:
Question Number: 3
The paid-up share capital of AB Ltd. Consisted of 1,00,000 Equity shares of ₹10 each fully paid and
50,000 equity shares of ₹10 each, ₹6 called up and paid-up. The company had a General Reserve of
₹20,00,000. It decided to utilize this reserve for issuing bonus shares at a premium of 50% for every
fully paid share held and for making partly paid shares as fully paid. Give journal entries to record
the above transactions.
Solution:
Particulars Dr. (₹) Cr. (₹)
General Reserve A/c ………..Dr. 2,00,000
To, Bonus to Shareholders A/c 2,00,000
(50000  ₹4)
(Being declaration of bonus out of reserve to convert partly paid
shares fully paid.)
Share Final Call A/c …………Dr. 2,00,000
To Share Capital A/c 2,00,000
(Being final call money due @ ₹4 per share as per Board’s Resolution
no. …dated…)
Bonus to Shareholders A/c ……Dr. 2,00,000
To Share Final Call A/c 2,00,000
(Being final call money adjusted.)
General Reserve A/c ………..Dr. 15,00,000
To Bonus to Shareholders A/c 15,00,000
(1,00,000  ₹15)
(Being the declaration of fully paid-up bonus shares out of reserve)
Bonus to Shareholders A/c ……Dr. 15,00,000
To Equity Share Capital A/c 10,00,000
To Securities Premium A/c 5,00,000
(Being issue of fully paid-up bonus shares of Rs.10 each at a premium
of 50% as per Board’s Resolution no. …dated…)
Module 1.1, Section 1.1.5
Ignore the following part in Page no. 82-83
As per Division II of Schedule III of the Companies Act 2013, Extract of Balance Sheet is to be shown as
follows: (Only difference in Equity and Liabilities menu).
Instead consider the following part (Balance Sheet as per Division I)
Module 1.2 Page No. 88 to 91

Ignore all the four pages. The Chapter starts from 1.2.1 in Page no. 92
Module 1.2, Section 1.2.3 Page 111

Consider the following before the Point ‘Provisions on Creation of Debenture Redemption
Reserve (DRR)’
The common sources that may be utilized by the companies for the purpose of redemption of debentures are
–
a. Redemption out of proceeds of fresh issue of shares/ debentures: Here the company issues fresh equity/
preference shares or debentures or bonds for raising the money required for redemption of debentures.
This may amount tom change in the capital structure.
b. Redemption out of profits: A company may utilize a portion of its profit which otherwise were available
for distribution of dividend to redeem the debentures. This may be done by transferring a portion of
profits to Debenture Redemption Reserve. The profits so transferred may be retained within the company
or may be invested outside in readily marketable securities.
c. Redemption out of capital: Here the company does not set aside any profits for redemption purpose.
Thus, eventually, the amount is paid out of capital.
In India, redemption of debenture is guided by Section 71 of the Companies Act, 2013 and Rule 18 of the
Companies (Share Capital and Debentures) Rules, 2014 which require mandatory creation of Debenture
Redemption Reserve. Hence, the redemption happens to be partly out of profits and partly out of capital.
Module 1.2, Section 1.2.3 Page No. 113

The ‘Note’ should be read as follows:
Note: It is to be noted that a company only requires to create DRR to the extent of 10% of the
nominal value of the debentures. Then, effectively 90% of the nominal value of debentures is
redeemed out of capital. In short, Investment of Debenture Redemption Fund requirement is needed
in the case of following types of companies:
i. All listed NBFCs
ii. All listed HFCs
iii. All other listed companies (Other than AIFIs, Banking Companies and other FIs); and
iv. All unlisted companies which are not NBFCs and HFCs.
Module 2: Preparation of the Statement of Profit and Loss and

Balance Sheet (As Per Schedule III of Companies Act,2013)
Page No. 153

Under the heading ‘Form and Content of Financial Statements’
The ‘Note’ to be read as follows
Note: In this Module, preparation of financial statements has been discussed primarily as per
Division I i.e., for whom Financial Statements are required to comply with the Companies
(Accounting Standards) Rules, 2021.
Module 2.3 - Page 205 to 246

Illustration 8 to 14 on Division II of Schedule III of the Companies Act, 2013 are for knowledge
purpose only.
Solved Case in Page No.215 – 218

In Page no. 216, before the ‘Solution’ consider inserting the following line:
‘The company follows Division I of Schedule III of the Companies Act, 2013.’

Caadt Inter

Uploaded by

Copyright:

Available Formats

Caadt Inter

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Caadt Inter

Uploaded by

Copyright:

Available Formats

SUPPLEMENTARY_PAPER 10_SYLLABUS 2022

Supplementary on Study Material of Paper 10: Corporate

Statement of Changes in Equity

A. Equity Share Capital

Module 1.1 Page No. 18

Statement of Changes in Equity

B. Equity Share Capital

Module 1.1 Page No. 56

Module 1.1 Section 1.1.4 Page No. 62

Module 1.2 Page No. 88 to 91

Module 1.2, Section 1.2.3 Page 111

Module 1.2, Section 1.2.3 Page No. 113

Module 2: Preparation of the Statement of Profit and Loss and

Page No. 153

Module 2.3 - Page 205 to 246

Solved Case in Page No.215 – 218

You might also like