Journal Entries for giving effect to the Capital Reduction Scheme:

(i) When denomination of Shares is not reduced; only paid up value is

reduced

(iv) For Sacrifice made by Debentureholders, if any;

(v) For Sacrifice made by Creditors, if any:

(vi) For recording any increase in the value of Assets (on Revaluation):

(vii) For recording decrease in the value of liability:

(viii) For making any Provision for Contingent Liability:

(ix) Capital Reduction Account is used for writing off various accumulated
losses, fictitious assets and loss on assets and liabilities and the journal
entry is

LET US KNOW
The amount to be written off cannot exceed the amount credited to Capital

Reduction Account. But if there is any reserve in the liabilities side of the
balance sheet, the same may be utilised in writing off accumulated losses
and fictitious assets. After writing off various assets, if any balance is left in
the Capital Reduction Account, the same will be transferred to Capital
Reserve Account.
1. The words And Reduced should be added to the name of the
company, if the National Company Law Tribunal (NCLT) so directs.
2. The amount written off in respect of fixed assets under a scheme of
reconstruction must be shown in the Balance Sheet for five years after the
date of reduction.
3. After completion of the accounting process the Capital Reduction
Account should not show any balance.