Underwriting and other share issue costs paid to a stockbroker or financial institution should be reported in the statement of financial position as a/an:
A) liability.
B) asset.
C) increase in share capital.
D) decrease in share capital.

Question

Quizplus · Accepted Answer

Underwriting and other share issue costs are directly deducted from the proceeds of the share issue, thus reducing the amount credited to share capital. This treatment reflects the costs as a decrease in the net funds received from issuing shares.

Underwriting and Other Share Issue Costs Paid to a Stockbroker