Internal Re-construction

Learn Internal Re-Construction in Advance

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Internal Re-Construction

Contents:-

1. Re arrangement of business.

2. To decreasing losses

3. To increasing profits by removing inefficiency

4. Removing the debit balance of P/L (negative)

5. Sacrifice today for a better future (contributor)

6. Example:- Air India, UTI, Bharti airtel (2003)

Meaning of internal Re-Construction

Procedure of internal reconstruction-steps

1 Director : NCLT = Current balance sheet, Dream balance sheet, NOC

2 NOC + Application + Dream balance sheet = NCLT

3 Meeting of liability = 51% ➢ Meeting of shareholder = 51%

4 Order passed by judge = ESC, PSC , Liability, fixed assets, Current assets reduced (signature)

5 Order must be fulfilled within 30 days

6 CA = (i) entry (ii) A/C (iii) balance sheet

7 Execution by judge

8 “and reduced”

Balance sheet of Company

Balance sheet of Company (Dream Balance Sheet)

Meaning of External Reconstruction

Examples of External Re – construction

(i) Forhans india Ltd --- Hindustan Ciba-Gigy Ltd

(ii) Uninor --- Telenor Communications Pvt Ltd.

(iii) Union Carbide India Ltd. --- Eveready Industries India

(iv) U.T.I --- Axis bank Ltd

(v) Tata Sky --- Tata Play (27 Jan 2022)

Difference between internal reconstruction and external reconstruction

Rules of Debit and Credit

American approach (Modern approach)

English approach (Traditional approach)

Journal Entries for Internal Re-construction

Steps for accounting treatment

Intangible assets includes the following

Fictitious assets include the following

Capital Reduction Account or Reconstruction Account

Outstanding Preference Dividend

Consolidation of Share

Subdivision of Shares

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