Variation of securities-executorship laws and accounts, Financial Accounting

Variation of securities

It would seem logical to carry out a strict apportionment between income and capital every time investments are bought or sold. If this were done, it would be necessary to divide the purchase price or sale proceeds between the pure capital element and the adjustment of income rights.

In practice, this is not done, following the rules of convenience, on the grounds that it unnecessarily complicates the accounts.  The situation is, therefore, as follows:

1. Purchase of investment cum. div.  The life tenant is entitled to the whole income when received, except where the investment is purchased cum. div. after the dividend has been declared, when the whole dividend goes to capital (Re. Peel's Settled Estates).

2. Disposal of investment cum. div. The life tenant is not entitled to any of the sale proceeds (Scholefield v. Redfern).

3. Disposal of investment ex. div.  The whole dividend received after disposal belongs to the life tenant. Any organized course of action to the detriment of the life tenant or the remainderman would be actionable by that party as a breach of trust.

Posted Date: 12/13/2012 5:27:21 AM | Location : United States







Related Discussions:- Variation of securities-executorship laws and accounts, Assignment Help, Ask Question on Variation of securities-executorship laws and accounts, Get Answer, Expert's Help, Variation of securities-executorship laws and accounts Discussions

Write discussion on Variation of securities-executorship laws and accounts
Your posts are moderated
Related Questions
petra corporation purchased P4,000 worth of merchandise on account terms 2/10, n?30, FOB shipping point. Prepaid transportation charges of P200 were added to the invoice.

DEBTOR'S PROPERTY AT COMMENCEMENT OF BANKRUPTCY 1) Doctrine of "relation back" : The trustee's title to the debtor's property is deemed to relate back to the commencement o

Holding company with a direct shareholding in sub-subsidiary company Under this type of structure, both the holding and subsidiary company have some shareholding in the sub-subsi

Leverage or Gearing Ratios - These ratios include the Long Term Debt to Equity Ratio, Total Debt to Equity Ratio, Interest Coverage Ratio. Here, the interest coverage ratio is al

Mason Co. issued $860,000 of 5 year, 13% with interest payable semiannually, at a market (efffective) interest rate of 12% Determine the present value of the bonds payable, using t

Defunct Companies A company may be dissolved under s.338 without winding up if the registrar has reasonable cause to believe it is defunct: The procedure is: a. Registrar writ

The following facts pertain to a noncancelable lease agreement between Lennox Leasing Company and Gill Company, a lessee. Inception date: May 1, 2012 Annual lease payment due at th

PVA ∞ = A(1 + k) -1 +  A(1 + k) -2 +..... + A(1 + k ) ∞ + 1 + A (1 + k) ∞ Multiplying both the sides of Eq (a7) by (1+k) provides: PVA ∞  = (1 +k) = A(1 +k) +A (1 +k)


3:Barnes Baskets, Inc. (BB) currently has zero debt. Its earnings before interest and taxes (EBIT) are $100,000, and it is a zero growth company. BB's current cost of equity is