Question:
Discount on issue of share is:
Discount on issue of share is:
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Discount on issue of shares = capital loss, shown on asset side under “Miscellaneous Expenditure” until written off.
Updated On: Sep 13, 2025
- Capital gain
- Capital loss
- Revenue gain
- Revenue loss
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The Correct Option is B
Solution and Explanation
Step 1: Meaning of discount on shares.
When a company issues its shares at a price below face value, the difference is called “discount on issue of shares”.
Step 2: Nature of loss.
This is not a trading (revenue) loss, because it is not related to day-to-day operations. It is connected with capital raising. Hence, it is a capital loss.
Step 3: Conclude.
Thus, discount on issue of shares is treated as a capital loss.
Final Answer: \[ \boxed{\text{Capital loss}} \]
When a company issues its shares at a price below face value, the difference is called “discount on issue of shares”.
Step 2: Nature of loss.
This is not a trading (revenue) loss, because it is not related to day-to-day operations. It is connected with capital raising. Hence, it is a capital loss.
Step 3: Conclude.
Thus, discount on issue of shares is treated as a capital loss.
Final Answer: \[ \boxed{\text{Capital loss}} \]
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