What You Will Learn!
- Meaning of internal Re-Construction
- Meaning of External Reconstruction
- Difference between internal reconstruction and external reconstruction
- Journal Entries for Internal Re-construction
- Steps for accounting treatment
- Consolidation of Share
- Subdivision of Shares
Description
Internal Re-Construction
Contents:-
1. Re arrangement of business.
2. To decreasing losses
3. To increasing profits by removing inefficiency
4. Removing the debit balance of P/L (negative)
5. Sacrifice today for a better future (contributor)
6. Example:- Air India, UTI, Bharti airtel (2003)
Meaning of internal Re-Construction
Procedure of internal reconstruction-steps
1 Director : NCLT = Current balance sheet, Dream balance sheet, NOC
2 NOC + Application + Dream balance sheet = NCLT
3 Meeting of liability = 51% ➢ Meeting of shareholder = 51%
4 Order passed by judge = ESC, PSC , Liability, fixed assets, Current assets reduced (signature)
5 Order must be fulfilled within 30 days
6 CA = (i) entry (ii) A/C (iii) balance sheet
7 Execution by judge
8 “and reduced”
Balance sheet of Company
Balance sheet of Company (Dream Balance Sheet)
Meaning of External Reconstruction
Examples of External Re – construction
(i) Forhans india Ltd --- Hindustan Ciba-Gigy Ltd
(ii) Uninor --- Telenor Communications Pvt Ltd.
(iii) Union Carbide India Ltd. --- Eveready Industries India
(iv) U.T.I --- Axis bank Ltd
(v) Tata Sky --- Tata Play (27 Jan 2022)
Difference between internal reconstruction and external reconstruction
Rules of Debit and Credit
American approach (Modern approach)
English approach (Traditional approach)
Journal Entries for Internal Re-construction
Steps for accounting treatment
Intangible assets includes the following
Fictitious assets include the following
Capital Reduction Account or Reconstruction Account
Outstanding Preference Dividend
Consolidation of Share
Subdivision of Shares
Who Should Attend!
- Any Student who pursuing in B,com M,com BBA MBA 11th & 12th Commerce C.A. C.S. and C.M.A.
