Instead of paying a cash dividend this year, more Goanna Ltd shares were issued to the existing shareholders of Goanna Ltd out of Goanna Ltd's asset revaluation reserve which accumulates revaluation increments of property, plant and equipment.This action is called:

Question

Quizplus · Accepted Answer

Capitalisation of reserves refers to the process of using accumulated reserves to issue additional shares to existing shareholders instead of paying a cash dividend. In this case, Goanna Ltd used its asset revaluation reserve to issue additional shares, which falls under the category of capitalisation of reserves. The other choices are not relevant to the given scenario.

Instead of Paying a Cash Dividend This Year, More Goanna