Question

In the Balance Sheet of a Company, Securities Premium is shown under ______.

Options

• Non-current Assets.

• Share Capital.

• Long-term Borrowings.

• Reserves and Surplus.

Answer 1

In the Balance Sheet of a Company, Securities Premium is shown under reserves and surplus.

Explanation:

Securities premium represents the extra money received by a company when it issues shares at a price higher than their face value. Under Schedule III of the Companies Act, 2013, this amount is treated as a capital profit and is strictly classified under the sub-head “Reserves and Surplus”, which falls under the main heading of Shareholders’ Funds on the Equity and Liabilities side of the balance sheet.