Identify the sub-head under which Debenture Redemption Reserve is shown in Balance Sheet of a Company as per Companies Act 2013.

Reserve and Surplus

The correct answer is Option (1) → Reserve and Surplus

Debenture Redemption Reserve (DRR) is a statutory reserve created by companies as per the requirements of the Companies Act, 2013.

1) Shareholder’s Funds include (a) Share Capital (b) Reserves and Surplus (c) Money received against share warrants

Reserves and Surplus are essential components that require careful classification. The following categories help organize these items effectively:
i) Capital Reserve: This category includes reserves set aside for specific capital-related purposes.
ii) Capital Redemption Reserve: Here, reserves are accumulated to facilitate the redemption of capital.
iii) Securities Premium Reserve: This category comprises the premium received from the issuance of securities.
iv) Debenture Redemption Reserve: Reserves are earmarked to ensure the timely redemption of debentures.
v) Revaluation Reserve: In this category, the reserves reflect the revaluation of assets or liabilities.
vi) Share Options Outstanding Account: This is a separate item that records the credit balance related to employee share-based payments.
vii) Other Reserves (Specifying nature and purpose): Any additional reserves with specific purposes are grouped under this category, clearly specifying their nature and intended use.
viii) Surplus: The balance from the statement of profit and loss is disclosed here, indicating allocations and appropriations, such as dividends, bonus shares, and transfers to/from reserves.