Discount on debentures
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Company AccountsQ-2 | Introduction to Company AccountsQuestion 4897 of 112
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Detailed Solution & Explanation
Discount on debentures:
The discount is a capital loss and it should be written off as early as possible.
Even whole amount can be written off in the year of issue itself against share
premium or any other capital profit.
Otherwise Debenture Discount can be written off over the lifetime of debentures as
follows (applying matching principle):
- If the Debentures are redeemable at the end of a period, then the Discount will be
written off equally over that period.
About This Chapter: Partnership & Companies
Paper
Paper 1: Accounting
Weightage
15-20%
Key Topics
Admission, Retirement, Death, Shares, Debentures
This chapter covers Admission, Retirement, Death, Shares, Debentures and is part of Paper 1: Accounting in the CA Foundation exam.
View Official ICAI SyllabusExam Strategy Tip
This topic carries 15-20% weightage. Focus on understanding core concepts rather than memorizing.
Key Concepts to Understand
Related Comparison Tables
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