| Commentary

214 Accounting consequences of payment out of capital

| Commentary

214 Accounting consequences of payment out of capital

If the permissible capital payment1 is less than the nominal amount of the shares redeemed or purchased, the company must transfer the amount of the difference to the company’s capital redemption reserve2. If the permissible capital payment is greater than the nominal amount of the shares redeemed or purchased, the company may treat the amount of any capital redemption reserve, share premium account or fully paid share capital as being reduced by the difference3.

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