Capitalisation - Law Dictionary Search Results
Home Dictionary Name: capitalisationCapitalisation
Capitalisation, the profits of a Company can be capitalised in accordance with the Articles of Association and the law. On the capitalisation of the profits they cease to be profits in the hands of the Company. The nature of the asset is changed although it does not make any difference in the total assets of the Company. But profits stands transmuted and transformed into capital. The most common example of capitalisation of profits is by issuance of bonus shares to the shareholders, P.K. Badiani v. C.I.T., AIR 1977 SC 560 (565): (1976) 4 SCC 502....
Be capitalised and distributed
Be capitalised and distributed, The expression 'be capitalised and distributed' in the resolution means 'is hereby capitalised and distributed'. In fact the whole tenor of the resolution shows that the distribution of the bonus shares became effective as from 30th Dec., 1954. If the ordinary shareholders became the owners of the bonus shares on and after Jan. 1, 1955 or on some later date, Shri Gopal Paper Mills v. CIT, (1971) 1 SCR 323: (1970) 2 SCC 80 (85): AIR 1970 SC 1750....
Capitalise
Capitalise, to convert (a periodical income or payment) into an equivalent capital sum: to compute or realize the present value of such a payment for a definite or indefinite length of time, Steel Authority of India Ltd. v. State of Madhya Pradesh, (1999) 4 SCC 76....
Bonus shares
Bonus shares, bonus share is an accretion. A bonus share is issued when the company capitalises its profits by transferring an amount equal to the face value of the share from its reserve to the nominal capital. In other words the undistributed profit of the company is retained by the company under the head of capital against the issue of further shares to its shareholders. Bonus shares have, therefore, been described as a distribution of capitalised undivided profit, Standard Chartered Bank v. Custodian, (2000) 6 SCC 427: AIR 2000 SC 1488 (1499). [Companies Act, 1956 Sch I, Table A, Rr. 96 (97)]...
capitalisation
same as capitalization...
Actual cost
Actual cost, The accepted accountancy rule for determining the cost of fixed assets is to include all expenditure necessary to bring such assets into existence and to put them in working condition. In case money is borrowed by a newly started company which is in the process of constructing and erecting its plant, the interest incurred before the commencement of production on such borrowed money can be capitalised and added to the cost of the fixed assets which have been created as a result of such expenditure. The above rule of accountancy should, in our view, be adopted for determining the actual cost of the assets in the absence of any statutory definition or other indication to the contrary, Challapalli Sugar Limited v. Commissioner of Income Tax, (1975) 3 SCC 572: AIR 1975 SC 97 (101)....
Income approach
Income approach, means a method of appraising real property based on capitalisation of the income that the property is expected to generate, Black's Law Dictionary, 7th Edn., p. 768...
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