Buyback of Equity Shares One Shot | Maximum Permissible Buyback + All Sums | CMA Inter Group 2

Buyback of Equity Shares One Shot Revision for CMA Inter Group 2 — Paper 10 Corporate Accounting. This video covers ALL concepts of Buyback of Shares from scratch — including Section 68 conditions, Premium on Buyback, journal entries, and Maximum Permissible Buyback (all 3 tests) — along with two fully solved important questions, so you can revise the entire chapter in one sitting before your exam. 📚 What you'll learn in this One Shot: ✔ Meaning of Buyback and how it differs from Issue of Shares ✔ Section 68 — legal conditions governing Buyback ✔ Condition 1 (New Issue of another class) vs Condition 2 (Creation of CRR) ✔ Key differences between Buyback and Redemption of Preference Shares ✔ Premium on Buyback (POB) — meaning and write-off sources (SP, P&L, GR) ✔ Journal Entries — all 5 standard entries for Buyback ✔ Expenses on Buyback — treatment ✔ Fully solved combined sum: Redemption of Preference Shares + Buyback in one question ✔ Maximum Permissible Buyback — Shares Outstanding Test, Resources Test, Debt-Equity Ratio Test ✔ Fully solved sum on Maximum Permissible Buyback across 3 different loan scenarios ✔ Journal entries for buyback under the maximum permissible limit ✔ Common mistakes students make in this chapter and how to avoid them 👨‍🏫 Taught by: Abhimanyyu Agarrwal 📖 Course: CMA Intermediate Group 2 📄 Paper: Paper 10 – Corporate Accounting 🙋 Frequently Asked Questions: Q1. What is buyback of equity shares? A. Buyback of equity shares is when a company repurchases its own equity shares from shareholders and pays them money in return, effectively reversing the process of an original share issue, governed under Section 68 of the Companies Act. Q2. What are the conditions for buyback under Section 68? A. A company must either make a new issue of shares of another class (only preference shares qualify) equal to the face value of buyback, or create a Capital Redemption Reserve (CRR) equal to the face value of buyback, or use a combination of both. Q3. What is the difference between Buyback and Redemption of Preference Shares in terms of CRR? A. For redemption of preference shares, CRR can only be created out of free reserves (General Reserve and P&L), whereas for buyback of equity shares, CRR can additionally be created using Securities Premium as well. Q4. What is Maximum Permissible Buyback? A. Maximum Permissible Buyback is the maximum number of equity shares a company can buy back, determined by taking the lowest value among three tests — the Shares Outstanding Test, the Resources Test, and the Debt-Equity Ratio Test. ⏱ Timestamps: 0:00 Introduction — What is Buyback of Shares? 1:01 Why Companies Do Buybacks (Objectives) 1:22 Section 68 — Conditions for Buyback 2:46 New Issue Condition vs CRR Condition 3:19 Buyback vs Redemption of Preference Shares — Key Differences 4:16 Combination of New Issue + CRR 6:49 Premium on Buyback (POB) — Meaning & Write-Off Sources 8:22 Journal Entries — The 5 Standard Entries 9:18 Expenses on Buyback — Treatment 10:26 Sum 1: Combined Question — Redemption of Preference Shares + Buyback 10:38 Reading the Balance Sheet & Given Data 13:15 Question Requirements & Legal Compliance Working Note 14:36 Working Note — Preference Share Redemption (POPS + CRR) 16:08 Working Note — Buyback (POB + CRR Planning) 18:38 Journal Entries — Redemption of Preference Shares 20:59 Journal Entries — Buyback of Equity Shares 23:16 Maximum Permissible Buyback — Introduction & 3 Tests 25:13 Test 1: Shares Outstanding Test 25:59 Test 2: Resources Test 26:32 Test 3: Debt-Equity Ratio Test 29:56 Sum 2: Parrot Limited — Maximum Permissible Buyback Question 33:29 Test 1 Calculation (Shares Outstanding) 37:49 Test 2 Calculation (Resources Test) 40:26 Test 3 Calculation — Case 1 (Loan 1800) 45:15 Test 3 Calculation — Case 2 (Loan 1200) 47:11 Test 3 Calculation — Case 3 (Loan 1500) 49:43 Final Comparison & Conclusion 50:42 Journal Entries for Maximum Permissible Buyback 56:08 Final Recap & Closing 🔔 Subscribe for more One Shot Revisions of CMA Inter Group 1 & Group 2 — Financial Accounting, Corporate Accounting & more, only on this channel! 📲 Follow for updates: 📞 𝐖𝐡𝐚𝐭𝐬𝐀𝐩𝐩: / 🌐 𝐕𝐢𝐬𝐢𝐭: ‎🌐 𝐖𝐡𝐚𝐭𝐬𝐀𝐩𝐩 𝐂𝐡𝐚𝐧𝐧𝐞𝐥: 🌐 𝐓𝐞𝐥𝐞𝐠𝐫𝐚𝐦: 🌐 𝐈𝐧𝐬𝐭𝐚𝐠𝐫𝐚𝐦: Download my premium, exam-ready Handwritten Notes for this chapter completely FREE here: Disclaimer: This video is for educational purposes to help CMA Intermediate students revise for their exams. #CMAInter #BuybackOfShares #MaximumPermissibleBuyback