SHARE APPLICATION MONEY Definition

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.

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MULTIPLE REGRESSION of approximating cost is a statistical method that can be used to estimate a cost function when there is more than one independent variable.

MATRIX ORGANIZATION is where a company superimposes a group or interdisciplinary team of project specialists on a functional organizational design. In a matrix organization the members have dual allegiances, i.e., to that particular assignment or project as well as their normal organizational department.

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