Can i Say I don't know or can i say "there is no such concept" (but how could i tell that there is no such concept because no one may not know every concept
14 November 2008
Dear A J Shankar. If you understand the meaning for "share suspense a/c" you can understand what is suspense capital. I hope both are same.
Share supense [suspense capital]: Company will issue applications to the public for subscribing shares. Public will also subscribe shares. After that company should generally allot the shares to applicants. If company has received applications and not made allotment such amount will be transferred to Share suspense a/c. To be precise, applications pending allotment is called suspense capital or share suspense. Let us see how it is possible through an example.
Assume there is a company by name X Ltd which closes its books of account on 31.12.08. Assume On 15th of December 2008, the company goes for public issue. Company receives 10000 applications. If 10000 applications are allotted immediately within the remaining 16 days, then there is no problem. Entire amount will be transferred to share capital. Out of 10,000 applicants if 8000 shares were allotted and 2000 were rejected means, then no problem. 8000 shares will be transferred to share capital and 2000 shares money will be refunded. If out of 10000 shares, 8000 shares were allotted on pro-rata basis, then also no problem. 8000 share money will be transferred to share capital and 2000 shares excess money may be utilised for adjustment against allotment. But till 31st december, 2008 if the company has not started allotment or only made a part allotment, then the shares pending allotment is called as shares suspense. Because, it is neither rejected nor allotted nor adjusted against future liability.
14 November 2008
Oh! Thanks a lot sir. It give a clear idea about share suspense a/c.
Let me know whether AS-4 will apply in this context.
I mean the company has not allotted the shares to the subscribers by B/S dt. But after a few days of B/S dt (say on jan 2nd of 2009) whether it is adjustable event or not?(By this time the board has not approved the accounts)
06 October 2009
Hello, is this an old query still pending? You can send me a Pm if yes....I m trying to take all old pending queries in Accounting Forum......Thanx.
06 October 2009
Hello, is this an old query still pending? You can send me a Pm if yes....I m trying to take all old pending queries in Accounting Forum......Thanx.
CAclubindia
