Reserves and Surplus are required to be classified as:
i) Capital Reserve ii) Capital Redemption Reserve iii) Securities Premium Reserve iv) Debenture Redemption Reserve v) Revaluation Reserve vi) Share Options Outstanding Account vii) Other Reserves (Specifying nature and purpose) viii) Surplus: Balance in statement of profit and loss; disclosing allocations and Appropriation such as dividend, bonus shares, transfer to/from reserve, etc.
* Significant additions/modifications regarding disclosure of reserve and surplus are as follows:
a) A reserve specifically represented by earmarked investments shall be termed as “Fund”.
b) ‘Debit’ balance of statement of profit and loss shall be shown as a negative figure under ‘Surplus’ head.
c) The balance of “Reserve and Surplus” after adjusting negative balance of Surplus, if any, shall be shown under “Reserve and Surplus” read even if the resulting figure is ‘negative’.
d) Share options outstanding account has been recognised as a separate item under ‘Reserve and Surplus’. ICAI’s Guidance Note on Accounting for Employee share based payments requires a credit balance in the ‘Stock option outstanding Account’ to be disclosed in balance sheet under separate heading’ between share capital and reserves and surplus as a part of shareholders fund. |
