Treatment of application money pending allotment


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Querist : Anonymous (Querist)
17 July 2012 Please advice me the treatment of application money pending allotment. Also intimate me the correct head under Schedule VI where the same should be shown.

17 July 2012 Please refer Guidance note on Revised Schedule VI.

There is a lot of guidance on this subject.

In summary, if the share applicable money is refundable, it is current liability else Equity.

If there is no sufficient authorised capital for issuance of equity shares against advance share application money, then the amount over and above authorised capital is to be considered as liability.

There are also certain disclosures to be given for Share application money pending allotment.

Refer Guidance note for complete and clear information.

Do revert back if there is any confusion while referring the guidance note with specific clause.


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