Which companies have issued debentures in recent past?
Many pinksheet companies do this. Its also called death spiral financing. Now that the economy is slowing down and people are going broke selling convertibles to the public is getting harder to do.
What is the accounting treatment for premium on issue of debentures?
It must be noted that debentures are formed of loan taken by the company. Shares on the other hand isn't, it is owners capital.Treatment-The premium on issue of debentures must be transferred to a separate account and is to be shown in the assets side of the balance side. This premium is to be deferred expenditure over the life of the debenture. The amount of each year which is deferred is to be debited in profit and loss account.Any corrections on answers are welcome.
If any unlisted private company wants to issue debentures to raise money, then how much can be issued without the permission of the SEBI?
A private company is always unlisted.Only public companies have an option to get thier securities listed on a stock exchange, provided they meet the prescribed criteria.Therefore SEBI doesn’t come into picture when we are talking about private companies.Since, it is a private company, it is prohibited by law to give invitation to the public for subscribing its securities.Debenture issue, thus, by a private company can be made only through private placement (by not inviting public at large but only to specific persons).There is no restriction on amount to be raised by debenture issue nor on the number of debenture-holders.
Can a private limited company issue debentures?
Yes, a private limited company can issue debentures.The power to issue debentures can be exercised on behalf of the Company as a meeting of the Board under the provisions of Section 179 (3) of the Companies Act, 2013. Further Section 71 of the Companies Act, 2013 deals with the provisions relating to the issuance of debentures along with the penalties for non compliance of the same which can be summarized as follows:A company may issue debentures with an option to convert such debentures into shares, either wholly or partly at the time of redemption. Provided that the issue of debentures with an option to convert such debentures into shares shall be approved by a special resolution passed by the shareholders in a duly convened general meeting of the company.Company can issue secured and unsecured debentures. Secured debentures may be issued by a company subject to such terms and conditions as may be prescribed. Further Company cannot issue any kind of debentures carrying any voting rights.A company shall pay interest and redeem the debentures in accordance with the terms and conditions of their issue.For any help regarding this, free to contact us at http://www.wazzeer.comIn case, you are thinking of getting some free advise from an experienced Lawyer (and Accountant), checkout Counsel application of Wazzeer.**For any Legal and Accounting support, Happy to help you, let us talk
What is the treatment of a securities premium reserve in a cash flow statement?
Securities Premium Reserve records for premium collected over and above face value of the share. It may be in cash or for considerations other than cash.Cash Flow Statement shows the flow of cash. Treatment of any change in value of Securities Premium Reserve can be as follows:If the Securities Premium increase due to premium collected on issue of securities(shares/debentures/bonds) for cash, the amount increased will be treated as cash flows from Financing Activity.If there is increase in value of Securities Premium due to shares issued for consideration other than cash, it will not be recorded in cash flow statement.If there is decrease in value of Securities Premium due to preliminary expense written off/share issue expense written off etc, it will not be recorded in cash flow statement.
How is SEBI protecting the interest of investors?
Investors are important to the financial markets. It is thus very important to protect the interests of the investors. Investor protection involves various measures established to protect the interests of investors. Investor protection measures by SEBI are in place to safeguard the investors from the malpractices in shares, the stock market, Mutual Funds, etc.Investor Protection Measures by SEBI:The Investor protection legislation is implemented under the Section 11(2) of the SEBI Act. Some of the measures are as follows:Stock Exchange and other securities market business regulation.Registering and regulating the intermediaries of the business like brokers, transfer agents, bankers, trustees, registrars, portfolio managers, investment consultants, merchant bankers, etc.Recording and monitoring the work of custodians, depositors, participants, foreign investors, credit rating agencies, etc.Registering investment schemes like Mutual fund & venture capital funds, and regulating their functioning.Promotion and controlling of self-regulatory companies.Keeping a check on frauds and unfair trading methods related to the securities market.Carry out investor awareness and education programme.Train the intermediaries of the business.Inspecting and auditing the security exchanges (SEs) and intermediaries.Assessment of fees and other charges.You can also lodge your complaint to SEBI on its SCORES website. SCORES stands for SEBI Complaints Redress System.One can go and lodge a complaint against any listed company, registrar, brokers, stock exchanges, depository, Mutual Funds, etc on it.Also, as said above SEBI has launched Investor Protection Fund (IPF) and Investor Education and Protection Fund(IEPF) to compensate investors. Investor Protection Fund is set up in order to compensate the claims of investors against the members of exchanges (brokers) who have defaulted or failed to pay.And under IEPF fund, all the share applications money, dividends, matured deposits, interest, debentures, etc. that are unclaimed for over seven years are pooled together. Investors who failed to collect their dividends or interests etc. can now seek a refund from IEPF.To read more about SEBI's investor protection measures read here - https://goo.gl/BA79JzTo read about Investor Protection Fund, follow this link - https://goo.gl/cDZVKbTo know more about Investor Education and Protection Fund, you can follow this link - https://goo.gl/PIo2bq
Journal Entries. Financial Accounting?
Having trouble answering this question for my college class. Please help! Moreno Company publishes a monthly sports magazine, Fishing Preview. Subscriptions to the magazine cost $29 per year. During November 2014, Moreno sells 14,040 subscriptions beginning with the December issue. Moreno prepares financial statements quarterly and recognizes subscription revenue at the end of the quarter. The company uses the accounts Unearned Subscription Revenue and Subscription Revenue. 1) Prepare the entry in November for the receipt of the subscriptions. 2)Prepare the adjusting entry at December 31, 2014, to record sales revenue recognized in December 2014. 3)Prepare the adjusting entry at March 31, 2015, to record sales revenue recognized in the first quarter of 2015
What are debentures?
Debenture is issued by the company in the form of a certificate, which provides a written acknowledgement of debt taken by the company.. Following points will help you in gaining some understanding about debentures:means to borrow funds by the companies,long-term instrument issued by corporate,yield fixed amount of interest to the holder, no matter whether the company is making profits or not,safer as compared to other investment options in companiesredeemed after a fixed period of time, called maturity period.As per Rule 18 of the Companies (Share Capital and Debentures) Rules, 2014, no company can issue debentures having a maturity date of more than 10 years from the date if issue. However, a company engaged in infrastructure projects can issue debentures for a maturity period not exceeding 30 years.may either be secured or unsecured, (debentures can be secured against some asset(s) and unsecured debenture is the one which is not secured against any asset)interest on debentures is tax-deductible expenditure in India and saves income tax for the company issuing it, (that’s why it is considered as the cheapest option for a company to raise finance)debenture holders have no voting rights, unlike equity share-holdersdebenture holders get debenture certificate (carrying coupon rate, maturity date, redemption value, other terms and conditions etc.). Debenture holders are the creditors of the company.Cheers Life :))