Hi everyone,
Revised schedule VI says "Share application money (SAM) pending allotment – separate line item – SAM not exceeding issued capital and to the extent not refundable shall be disclosed as seperate line item in Capital and the balance in other current liabilities". What if share application money pending allotment exceeds issued capital? What is the disclosure requirements? Is there any legal complications? Kinldy guide me in this.
Thanks & Regards,
Satya
Any subscripttion received by the company against issue of share capital can be regarded as 'subscribed share capital" only when the share capital is actually subscribed and alloted as well. Until the allotment is made, any subscripttion cannot be included in amount of subscribed share capital.
Excess application money received due to over subscripttion, however may be treated as "Current liability". The ICAI Compendium of opinions, (Vol. XV, (1996 Edn.) PP. 34 to 36.
Thanks & Regards
Shankar
Gupta Sachdeva & Co. Chartered Accountants
New Delhi
CA Final
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