Issue Of Shares At Discount

[VITAL]

"The following policy would be followed by the Commission while considering the applications for issue of shares at a discount

(a) Discount shall be allowed only if the financial projections establish that injection of the fresh capital will result in enough profits enabling the company to amortize the discount within a period of not more than 5 years."

This is an extract from the Guidelines on Issue of Shares at a Discount.

My question
Is the above treatment in accordance with IFRSs?
What is deferred cost?

[kamranACA]

Guidelines are outdated and are by no means the legally enforceable financial reporting framework.

After revision of 4th and 5th schedule (that was significant part of financial reporting framework) there is no room to recognize any such deferred cost.

Regards,

[VITAL]

So Share premium reserve/capital reserve is to be used in writing off whole amount of discount in a given year.

[kamranACA]

Section 83 (2) of the Companies Ordinance, 1984 is to be seen.

Regards,

[VITAL]

While reading section 83 I came across the Guidelines and noticed that unusual accounting treatment. This prompted me to raise question on the validity and applicability of the accounting treatment and I got answer from you. Thanks.

So these Guidelines need revision.