Overview

share premium account


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The account to which any share premium must be credited. The balance on the share premium account may be used for specified purposes: the issue of bonus shares; the writing-off of preliminary expenses; the writing-off of underwriting commissions; the provision of a premium to be paid on the redemption of debentures; the provision of a premium to be paid on the redemption or purchase of share capital, subject to certain limits. The share premium account may not be used to write off goodwill on consolidation. Relief from the creation of a share premium account is (see merger relief) available in specified circumstances.

the issue of bonus shares;

the writing-off of preliminary expenses;

the writing-off of underwriting commissions;

the provision of a premium to be paid on the redemption of debentures;

the provision of a premium to be paid on the redemption or purchase of share capital, subject to certain limits.

Subjects: Financial Institutions and Services — Accounting.


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