SHARE APPLICATION MONEY Definition

Bookmark and Share

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.

Learn new Accounting Terms

REALIZATION PRINCIPLE is that revenue should be recognized at the time goods is sold and services are rendered.

WHEN-ISSUED, in securities, is a transaction made conditionally because a security, although authorized, has not yet been issued, e.g, new issues of stocks or bonds, stocks that have been split and Treasury securities are all traded on a when-issued basis.

Suggest a Term

Enter Search Term

Enter a term, then click the entry you would like to view.