08-01-2007, 09:00 PM
Dear Nauman,
The issuance of Bonus shares depends upon management's (Board of directors own decision who recommend it for approval in general meeting of shareholders/members. Bonus shares are basically the capitalisation of reserves into share capital. The bonus shares issuance does not bring any cash or cash equivalent resource to the company. Its issuance does not also alter the position of equity before and after its issuance.
You can study the Rule 6 of Companies (Issue of Capital) Rules 1996. These rules can be located in any bound of Companies Ordinance, 1984 available in market.
As far as treatment is concerned, it has already been discussed under this sub-forum in another thread. You must read it in detail.
Best regards,
Kamran.
The issuance of Bonus shares depends upon management's (Board of directors own decision who recommend it for approval in general meeting of shareholders/members. Bonus shares are basically the capitalisation of reserves into share capital. The bonus shares issuance does not bring any cash or cash equivalent resource to the company. Its issuance does not also alter the position of equity before and after its issuance.
You can study the Rule 6 of Companies (Issue of Capital) Rules 1996. These rules can be located in any bound of Companies Ordinance, 1984 available in market.
As far as treatment is concerned, it has already been discussed under this sub-forum in another thread. You must read it in detail.
Best regards,
Kamran.
