Question

Outstanding Share Option Account is shown under the head _______, as per the balance sheet format prescribed as per Schedule III of the Companies Act 2013.
1. Share Application Amount Pending Allotment
2. shareholder reserve
3. Reserves and surplus
4. share capital

Answer 1

Correct Answer - Option 3 : Reserves and surplus

The correct answer is ​reserves and surplus

• Outstanding Share Option: The share option outstanding is the difference between the market value and the issue price of shares granted to employees under the Employees Stock Option Scheme.
• For example, if employees are given shares for Rs 60 each, but the market price is Rs 100, the difference, or Rs 40, should be credited to this reserve.

• As per Schedule III of the Companies Act 2013, Share Option Outstanding Account is shown under subhead Reserves and Surplus under the head Shareholders’ Funds.