HARE APPLICATION MONEY, is that money received by a company during an Intial Public Offer(IPO). Payments received for a subscription of stock or share is normally received over the IPO life. For example: ABC Limited has been registered with an authorized capital of $5,00,000 divided into 5,000 shares of $100 each of which, 2,500 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
total of, $105/share
The amounts received would be known as a current liability until such time as the stock is issued, then it would be considered as part of equity.