Eps calculation
This query is : Resolved
30 October 2012
If we do have share application money pending for allotment then what will be the impact on calculation of EPS.
According to AS -20: share application money pending for allotment or any advance share application money as at the balance sheet date,which is not statutorily required to be kept separately and is being utilized in the business of the enterprise, is treated in the same manner as dilutive potential equity shares.
Point no. 1) As at date we don't know the exact proportion of security premium & share capital.
Point No. 2) as says which is not statutorily required to kept separately.
means ?
According to AS -20: share application money pending for allotment or any advance share application money as at the balance sheet date,which is not statutorily required to be kept separately and is being utilized in the business of the enterprise, is treated in the same manner as dilutive potential equity shares.
Point no. 1) As at date we don't know the exact proportion of security premium & share capital.
Point No. 2) as says which is not statutorily required to kept separately.
means ?
30 October 2012
Share application money pending for allotment holds an impact on Diluted EPS calculation.For this you must have the information regarding no. of shares to be allotted. As you dont have the info regarding the security premium portion and share capital you must discuss it with the management and as per the tentative plans work out the no. of share by deciding the premium and capital portion.Give notes accordingly.
As for point 2 it signifies that there is no statutory requirement of keeping the share application money aside, it can be utilized in the business of the enterprise.
As for point 2 it signifies that there is no statutory requirement of keeping the share application money aside, it can be utilized in the business of the enterprise.
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30 October 2012
Thanks for the reply...can you please provide some examples for statutory requirement of keeping share application Money aside
21 July 2024
Statutory Requirements for Keeping Share Application Money Aside:
The phrase "statutorily required to be kept separately" refers to legal or regulatory requirements that dictate how share application money must be managed or held. Here are some examples:
Companies Act Requirements: In many jurisdictions, the Companies Act or equivalent legislation specifies how share application money must be managed until allotment. For instance, it may require the creation of a separate bank account where share application money must be deposited until shares are allotted.
Regulatory Authority Requirements: Regulatory bodies such as the Securities and Exchange Board of India (SEBI) may have specific rules regarding the handling and utilization of share application money to protect investor interests and ensure transparency.
Listing Requirements: If a company is listed on a stock exchange, the exchange’s listing requirements may stipulate how share application money must be managed and disclosed.
The phrase "statutorily required to be kept separately" refers to legal or regulatory requirements that dictate how share application money must be managed or held. Here are some examples:
Companies Act Requirements: In many jurisdictions, the Companies Act or equivalent legislation specifies how share application money must be managed until allotment. For instance, it may require the creation of a separate bank account where share application money must be deposited until shares are allotted.
Regulatory Authority Requirements: Regulatory bodies such as the Securities and Exchange Board of India (SEBI) may have specific rules regarding the handling and utilization of share application money to protect investor interests and ensure transparency.
Listing Requirements: If a company is listed on a stock exchange, the exchange’s listing requirements may stipulate how share application money must be managed and disclosed.
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