Identify the major head under which 'Share Options Outstanding Account' are disclosed.
Answer & explanation
Correct answer: option 1
The correct answer is option 1- Shareholder's Fund.
'Share Options Outstanding Account' are disclosed in Shareholder's Fund.
Shareholder’s Funds
(a) Share Capital
(b) Reserves and Surplus
(c) Money received against share warrants
* Share options outstanding account has been recognised as a separate item under ‘Reserve and Surplus’. ICAI’s Guidance Note on Accounting for Employee share based payments requires a credit balance in the ‘Stock option outstanding Account’ to be disclosed in balance sheet under separate heading’ between share capital and reserves and surplus as a part of shareholders fund. Thus major head is shareholder fund and subhead is reserves and surplus.