Ifrs


What is the difference between IFRS and legal maintenance of capital?
 
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ha21@rediffmail.com Mumbai : 9820174108

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Keep Smiling .... Hemant Agarwal
VISIT:  www.chshelpforum.com

 
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respected ma'am

Capital maintenance, also known as capital recovery, is an accounting concept based on the principle that a company's income should only be recognized after it has fully recovered its costs or its capital has been maintained. A company achieves capital maintenance when the amount of its capital at the end of a period is unchanged from that at the beginning of the period. Any excess amount above this represents the company's profit.

Financial capital maintenance. Under this concept a profit is earned only if the financial (or money) amount of the net assets at the end of the period exceeds the financial (or money) amount of net assets at the beginning of the period, after excluding any distributions to, and contributions from, owners during the period.On the other hand, legal capital maintenance can be described as the doctrine that forbids a corporation to return capital to its shareholders, unless authorized by law (e.g., sanctioned reduction of capital). The corporation is only free to pay profits to the shareholders

regards

 
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