Overview

Internal Re-ConstructionContents:- 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-ConstructionProcedure 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 CompanyBalance sheet of Company (Dream Balance Sheet)Meaning of External ReconstructionExamples 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 reconstructionRules of Debit and CreditAmerican approach (Modern approach)English approach (Traditional approach)Journal Entries for Internal Re-constructionSteps for accounting treatmentIntangible assets includes the followingFictitious assets include the followingCapital Reduction Account or Reconstruction AccountOutstanding Preference DividendConsolidation of ShareSubdivision of Shares

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