Tag Archives | Types

Private and Public Company: Difference | India | Accounting

The upcoming discussion will update you about the differences between private and public company. Difference # Private Company: 1. The minimum number of members required to form a company is two. 2. The maximum number of members must not exceed fifty. 3. It must have two directors. 4. Shares are not freely transferable. 5. It […]

Types of Shares: Preference and Equity | Accounting

The shares which can be issued by a company, are of two types:- 1. Preference Shares 2. Equity Shares. Type # 1. Preference Shares: The Preference Shares are those which have some preferential rights over the other types of shares. A share to be preference share, must have two preferential rights: [Sec. 85(1)] (a) They […]

Amalgamation of a Company: 2 Types | Accounting

The following points highlight the two main types of amalgamation of a company. The types are:- 1. Amalgamation in the Nature of Merger 2. Amalgamation in the Nature of Purchase. Type # 1. Amalgamation in the Nature of Merger: An amalgamation in the nature of merger should, according to the Accounting Standard – 14, satisfy […]

Treatment of Minority Interest | Company

In this article we will discuss about the treatment of minority interest in the consolidated balance sheet, explained with the help of a suitable illustration. The Subsidiary Company is a wholly owned Subsidiary of Holding Company. It may be possible that Holding Company may not hold 100% shares of the subsidiary Company. A part of […]

Holding Company: Advantages and Disadvantages | Accounting

In this article we will discuss about the advantages and disadvantages of holding company. The advantages of holding company are in brief: (1) A holding company is a legal personality and it is very easy to form a holding company because we simply have to purchase the controlling interest of other companies. (2) Each member […]

Final Accounts of General Insurance Companies | Accounting

In this article we will discuss about the final accounts of general insurance companies, explained with the help an illustration. General insurance business means business other than life insurance business. General insurance companies operating in India were nationalised on 13th May, 1971 by the Ordinance of the President of India. The accounts of the General […]

Types of Insurance Business in India | Company

Indian Insurance business can be divided into two categories: (A) Life Insurance (B) General Insurance: which includes (a) Fire Insurance (b) Marine Insurance (c) Miscellaneous Insurance (A) Life Insurance: Life insurance is a contract in which insurer, in consideration of a premium, undertakes to pay a certain sum of money either on the death of […]

Final Accounts of LIC (With Format) | Accounting

This article provides a format of final accounts of LIC.  A life insurance company shall prepare the Revenue Account [Policyholders’ Account], Profit and Loss Account [Shareholders’ Account] and the Balance Sheet in Form A-RA, Form A- PL and Form A-BS, as prescribed in this Part, or as near thereto as the circumstances permit. Provided that […]

Valuation of Human Resources: 3 Approaches | Accounting

In this article we will discuss about the valuation of human resources with the help of three approaches namely:- 1. Historical Cost Approach 2. Replacement Cost Approach 3. Opportunity Cost Approach. 1. Historical Cost Approach: The actual cost incurred on recruiting, selecting, training and developing the human resources of the organisation are capitalized and written […]

Inflation Accounting: Need, Merits and Demerits | Accounting

In this article we will discuss about:- 1. Need for Inflation Accounting 2. Merits of Inflation Accounting 3. Demerits. Need for Inflation Accounting: Accounting is based on the traditional concept of cost and revenue. Money is the yardstick for measuring profits and losses and financial health of the business — operating results and financial position. […]

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