GAIN Definition

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GAIN is: a. the amount by which the revenue of a business exceeds its cost of operating; b. rise in rate or price; c. earn on some commercial or business transaction; d. earn as salary or wages.

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SHARE APPLICATION MONEY is that money received by a company during an IPO. Payments received for a subscription of stock is normally received over the IPO life. For example: Widgets Limited has been registered with an authorized capital of $2,00,000 divided into 2,000 shares of $100 each of which, 1,000 shares were offered for public subscription at a premium of $5 per share, payable as:

  • on application $10
  • on allotment $25 (including premium)
  • on first call $40
  • on final call $30

For a total of $105/share

The amounts received would be carried as a current liability until such time as the stock is issued, then it would be considered as part of equity.

STATEMENT OF ACCOUNTING POLICIES is normally comprised of: a definition of the reporting organization, statement of general accounting policies, statement of particular accounting policies, and a statement of changes in accounting policies.

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