Abstract
Capital reconstruction schemes usually become necessary following periods of losses, and any or all of the following features will be present.
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(i)
A debit balance will have built up on the profit and loss account.
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(ii)
In addition to (i), there may be other debit balances on the books, representing a non-existent or fictitious asset — e.g. goodwill.
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(iii)
The business may be unable to meet its obligations to creditors as and when payments become due. These obligations will include interest relating to loans.
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(iv)
There may be arrears of dividends on cumulative preference shares.
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© 1988 P. Stevens and B. Kriefman
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Stevens, P., Kriefman, B. (1988). Capital Reconstruction. In: Work Out Accounting ‘A’ Level. Macmillan Work Out Series. Palgrave, London. https://doi.org/10.1007/978-1-349-09807-1_8
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DOI: https://doi.org/10.1007/978-1-349-09807-1_8
Publisher Name: Palgrave, London
Print ISBN: 978-0-333-45124-3
Online ISBN: 978-1-349-09807-1
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