Buyback of Securities Notes for CA Inter Advanced Accounting

The notes begin with the meaning of buyback, noting that it applies only to equity shares and is similar to redemption. They list three sources for buyback: the open market, a proportionate offer to existing equity shareholders, and the employee stock option plan. The accounting section then walks through matching the capital requirement, with fresh issue of preference shares as the direct route and creation of capital redemption reserve from free reserves as the indirect route. The journal entries for the due amount, payment and closing of the premium on buyback are shown step by step.

The third page sets out the provisions of Section 68 in a numbered list. It covers full paid-up shares, authorisation by the articles of association, board resolution and special resolution requirements, and the 10 percent exception for board resolution. It also notes the one-year time limit to complete a buyback, the seven-day rule for cancelling bought-back shares, and the gaps before a fresh buyback or a new issue of the same kind of shares. These points suit students preparing for exam questions on the legal framework.

These notes suit CA Inter students studying Advanced Accounting who want a compact revision sheet for buyback of securities. They are useful for quick recall of journal entries before exams and for checking the statutory conditions that often appear in theory questions. Students who prefer to study from a single handwritten summary, rather than long textbook chapters, may find them helpful for last-minute revision.

• Meaning of buyback of securities
• Sources of buyback: open market proportionate offer ESOP
• Matching capital requirement and capital redemption reserve
• Journal entries for buyback and premium on buyback
• Section 68 Companies Act 2013 conditions
• Resolutions required for buyback
• Time limits and cancellation of bought-back shares