Just finished the video and I loved your explanation and the extra steps you added in 8:11 to explain the whole entry but that nerdy dude was a bit scary (An owl might be better)
Help me out here. At step 3, you allocate the share issuance costs. Why is this applied to ALL share holders, after stock issuance, as compared to just the applying investors? Seems to me my share capital should not fund (pro-rata) someone else's investment cost, and that investment cost should be charged to the applicants. Is there a reason to apply the cost to all and not just the new subscribers?
In this example I am assuming this is the first public offering of shares and I didn't want to complicate the fundemental transactions by assigning issuance costs on a pro-rata basis. You are right though, if this was a capital raising after the IPO then you definately would only want to allocate issuance costs to only the applying investors. Hope that helps :)
Harold your a legend this cut through an entire day of said bashing head against the wall, do you happen to have an example where the issue is oversubscribed or the issue involves Application, allotment AND call with varying levels of commitment at each stage? I'm stuck on the entries for reporting the allotment and call where subscribers have partially paid in full and others forfeit shares...understand if this is too specific, your explanation above has helped a lot though, cheers
Thanks for the vedio. I have a question please. We have accounting rules to give debit and credit based on Personal/Nominal/Real account. Ie. Debit Receiver Credit giver So based on those rules how should we give give debit or credit to Application and Allotment? What accout they belong to? Are those liabilities? Eg: When we receive money in Bank , based on Real account rule 'Debit what comes in' we debit Bank. Please advice what accounting rules we should apply? Thanks.
Great video. Is the Application account a 'liability' or an 'equity' account? I thought the fundamental difference between liabilities and equity was 'who' is owed the assets. i.e. equity presents capital that is owed to owners while any other asset owed to any one but owners is a liability. On that definition, why is the 'Application - Ordinary Share Capital' account a liability per your video?
Fully worked solution available here: drive.google.com/file/d/1h8dK1pPFNg-LSuRU16fc2ZI2e-BPzHKQ/view?usp=sharing
Hope it helps :)
Harold Walden thank you 😊
"Keep bashing your head against the wall" was the most comforting part of this video. Thank you
This is absolutely very understanding to me as a Accounting student ✊
Glad to hear it mate, thanks for leaving a positive comment, I really appreciate it 🤓
As not accounting student also😢
Wish my lecturers were this good
Thanks 🤓
Just finished the video and I loved your explanation and the extra steps you added in 8:11 to explain the whole entry but that nerdy dude was a bit scary (An owl might be better)
Thanks man, I'll let you know how my exams goes
I liked the last entry ...share costs are debited against capital
Great to hear
Thank you so much...do more videos n notes for me please🥺😭😭😭
I'm studying economics but I don't have basic skills of accounting 😭
If you make a list of some topics I would be happy to go through some of the topics.
you just saved me omg THANK YOUUUUU
Thanks for the video! Great explanation helped me a lot.
Glad to see it helped. Thanks for taking the time to leave a positive comment, I really appreciate it 🤓
Nice explanation 👌
Thanks, glad it helped :)
very helpful. Thanks
SOOOO HELPFUL
Great to hear 🤓
Help me out here.
At step 3, you allocate the share issuance costs. Why is this applied to ALL share holders, after stock issuance, as compared to just the applying investors?
Seems to me my share capital should not fund (pro-rata) someone else's investment cost, and that investment cost should be charged to the applicants.
Is there a reason to apply the cost to all and not just the new subscribers?
In this example I am assuming this is the first public offering of shares and I didn't want to complicate the fundemental transactions by assigning issuance costs on a pro-rata basis. You are right though, if this was a capital raising after the IPO then you definately would only want to allocate issuance costs to only the applying investors.
Hope that helps :)
@@HaroldWalden sure does, thanks so much for confirming!
Harold your a legend this cut through an entire day of said bashing head against the wall, do you happen to have an example where the issue is oversubscribed or the issue involves Application, allotment AND call with varying levels of commitment at each stage? I'm stuck on the entries for reporting the allotment and call where subscribers have partially paid in full and others forfeit shares...understand if this is too specific, your explanation above has helped a lot though, cheers
Thank you, this was helpful :)
No problem 🤓
Thanks for the vedio. I have a question please.
We have accounting rules to give debit and credit based on Personal/Nominal/Real account. Ie. Debit Receiver Credit giver
So based on those rules how should we give give debit or credit to Application and Allotment?
What accout they belong to?
Are those liabilities?
Eg: When we receive money in Bank , based on Real account rule 'Debit what comes in' we debit Bank.
Please advice what accounting rules we should apply? Thanks.
Great video. Is the Application account a 'liability' or an 'equity' account? I thought the fundamental difference between liabilities and equity was 'who' is owed the assets. i.e. equity presents capital that is owed to owners while any other asset owed to any one but owners is a liability. On that definition, why is the 'Application - Ordinary Share Capital' account a liability per your video?
Because the business is always obligated to repay the owner of the capital, hence it is considered a liability, a non current one that is.
wish you were my tutor :(
I wish the kids that I tutored in person thought that 🥺
W vid