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Terminology in Accounts

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Submitted By vijaymunugala
Words 1764
Pages 8
Tangible assets: Assets which t have physical existence or which are touchable. Ex: Plant and machinery, buildings, furniture etc.
Intangible assets: Assets which don’t have physical existence or which are not touchable. Ex: Goodwill, Patents, etc.
Share warrants: (Page 74 of Tata steel annual report)
A warrant gives the holder the right but not the obligation to buy an underlying security at a certain price, a specified quantity at predetermined future time. A share warrant cannot be issued by a private company. A share warrant can be issued only by public limited companies. The holder of the share warrant is entitled to receive dividend as decided by the company.
Hybrid perpetual securities: The unique features of these securities are that they are perpetual in nature, with no maturity or redemption, and are callable only at the option of the Company thereby incorporating equity characteristics. (Page 154 and 128 of Tata steel annual report)
Bonus issue: Capitalisation of reserves. It involves transfer of reserves and surplus to share capital account. It doesn’t involve cash inflows to the company. The number of shares outstanding increases. There is no change in the wealth of the shareholders effectively.
Rights issue: It involves issue of shares to the existing shareholders. It involves cash inflows to the company. Number of shares outstanding also increases.
Deferred tax liabilities/assets: (page 156, 179, 192 and 212)
Deferred tax liability arises when the tax on accounting income as per the companies act is less than tax as per Income tax. Deferred tax asset arises when the tax on accounting income as per the companies act is more than tax as per Income tax.

Ex:
Asset value is Rs.6,000

|As per Companies Act |2010 |2011 |2012 |Total |
|Sales

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