Bnus Share
Bonus Share :- when a company which has large amount of accumulated profit & reserves wants to pay a dividend to its existing shareholder without depleting its cash recourses issues to them without receiving payment in cash such shares are called bonus shares. Bonus shares of gift shares can be issued out of following. Balance in profit and loss Reserve and other Revenue Reserve Sinking fund General reserve or reserve fund Capital For redemption on debentures (after the redemption of debentures) Profit prior to incorporation or profit on sale of fixed assets Share premium Capital redemption reserves It should be noted that if the bonus shares are issued out of capital redemption reserve account or share premium account, then bonus shares should be fully paid bonus shares.