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What is the treatment of premium on issue of debentures/shares in a cash flow statement?

Question:

What is the treatment of premium on issue of debentures/shares in a cash flow statement?

Premium on shares

When a company decides to issue its shares at price higher than the par value, the difference between the share price and the par value is termed as premium.

Answer and Explanation:

Premium on issue of debentures/shares are reflected in the Cash Flow Statement under the head Cash Flow from Financing activities as they are non-operating in nature.


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How to Calculate Risk Premium: Definition & Formula

from Financial Accounting: Help and Review

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