05-28-2007, 05:57 PM
Dear,
You can see the Technical Release (TR-15) issued by ICAP on thi issue.
The recepient will not make any accounting entry in his books of account. He will, however, enhance the number of shares held by him in the disclosure given in financial statements.
Bonus shares are normally paid out/issued by way of capitalization of accumulated profits and does not therefore increase the net worth of the issuing company.
Therefore, the share of shareholder/investee in the net assets also remains same. Therefore, bonus shares are not accounted for in value terms by the shareholders.
Regards,
Kamran.
You can see the Technical Release (TR-15) issued by ICAP on thi issue.
The recepient will not make any accounting entry in his books of account. He will, however, enhance the number of shares held by him in the disclosure given in financial statements.
Bonus shares are normally paid out/issued by way of capitalization of accumulated profits and does not therefore increase the net worth of the issuing company.
Therefore, the share of shareholder/investee in the net assets also remains same. Therefore, bonus shares are not accounted for in value terms by the shareholders.
Regards,
Kamran.
