Share application money pending allotment (and not due for refund) has to be shown as a separate item on the face of the balance sheet and is not included in 'shareholders' funds'.
However, share application money (or application money for other securities) which has become due for refund has to be presented under 'other current liabilities' along with interest accrued thereon.
The existing practice is to disclose share application money as a separate line item under shareholders' funds (unless it is due for refund).
In case of the share application money pending allotment, the terms and conditions including the number of shares proposed to be issued, the amount of premium, if any, and the period before which shares shall be allotted has to be disclosed.
It has also to be disclosed whether the company has sufficient authorised capital to cover the share capital amount resulting from allotment of shares out of such share application money.
Further, the period for which the share application money has been pending beyond the stipulated period for allotment along with the reasons for delay should be disclosed. In some cases shares are allotted but money is refunded after a few years. In such a case it is funding by loan.
