As 13

This query is : Open

Querist : Anonymous

Querist : Anonymous (Querist)

11 October 2011 what should be the treatment of "share application money" in the books of investor keeping in view AS-13? Shall it be treated as investment or Loans & Advances. pl. support the answer with relevant case law, if any.

CA SUMiT PATWARi

CA SUMiT PATWARi (Expert)
Follow

11 October 2011 The amount should be disclosed as loans and advances and not as investments.

The nature of the share application money is never as an investment. It is just a deposit lying with the company, as The share application money is not really invested in shares. It is an advance against issue of shares.

Querist : Anonymous

Querist : Anonymous (Querist)

12 October 2011 sir, is there any case law to support your view?

CA Pushpendra Gaur

CA Pushpendra Gaur (Expert)
Follow

12 October 2011 As per my opinion they must be classified under "Other Current Assets" as per new Schedule VI,

the opinion of other experts is invited on the issue.

The share application money does not fall in the category of advance in my opinion as advance is given for the certain execution of a work/contract in future. when the execution is uncertain, that whether the contact will be done or not is an advance against issue of shares as rightly quoted by Mr. Sumit but to be classified under oTHER CURRENT ASSETS.

the opinion of other experts is invited on the issue.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now