Suspance Capital

can you brief your question

What??

Capital Suspense account is generally used when the transaction can not be appropriately classified under any other capital account due to not meeting the requirements to classify under other capital accounts.

For example, in case of companies, when companies issue shares and recieve application money for subscripttion, the amount received on application can be grouped under capital suspense account pending the allotment of shares because it can not be grouped under share capital untill and unless shares have actually been subscribed and alloted. Once shares are alloted, capital suspense account is regrouped to share capital and share premium account (with break up of face value and share premium above face value).

Thankyou very very much Varun Malhotra Sir.

Varun

can u explain the balance sheet treatment at the end of the F/Y , when share are

pending allotement, in which schedule the same same shal be kept.

gautam

Pending the allotment, application money received will be disclosed separately under shareholder's fund as advance towards share capital. It will not be included under share capital grouping.

Hope this clarifies.