What Is Share Premium Account Balance Sheet

Share premium account share forfeited account capital reserve provisions like provision for tax dep.

What is share premium account balance sheet. A share premium account is typically listed on a company s balance sheet. It is shown on the balance sheet as part of shareholders funds called the share premium account. It is a statutory reserve which forms part of a company s non distributable reserves. What is balance sheet.

A share premium account shows up in the shareholders equity portion of the balance sheet. A share premium account is a type of business account that is often included on a company balance sheet the purpose of the account is to provide a means of posting payments received by a shareholder for shares issued when those payments exceed the actual cost of the share. The funds that are maintained in this type of account can be used for a variety of purposes such as underwriting costs. This account is credited for money paid or promised to be paid by a shareholder for a share but only when the.

The share premium account is likely to grow and diminish over time as a company is likely to issue shares in line with the current market value of its shares rather than the essentially arbitrary par value of the shares. The share premium account represents the difference between the par value of the shares issued and the subscription or issue price. Share premium is the additional amount of funds received exceeding the par value of security. It s also known as additional paid in capital and can be called paid in capital in excess of par value.

The ending balance of the share premium account is recorded in the statement of financial position after the share capital. A share premium account shows up in the shareholders equity portion of the balance sheet. Yes share premium paid is part of paid up capital and shown separately as share premium account in equity section of balance sheet. That part of shareholders funds shown separately on the balance sheet formed of the premium paid for new shares above their nominal value.