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Premium (excess of buy-back price over par value) paid on buy-back is adjusted against:
ARevaluation Reserve
BCRR
CFree reserves and / or Securities Premium Account
DCapital Reserve
Answer & Solution
Correct answer: C. Free reserves and / or Securities Premium Account
1. Step 1: Per Ch 12, the premium paid on buy-back must be adjusted against free reserves and/or Securities Premium.
2. Step 2: Revaluation Reserve (unrealised) cannot be used.
3. Step 3: Hence (B).
_Source: ICAI BoS CA Inter Paper 1, Ch 12 "Buy-Back of Securities"_