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When demand for a particular share is more than its supply, it is said to be oversubscribed. Oversubscription leads to sky high cut-off prices of shares and often leads to non-allotment of shares. It is always good to get an idea of oversubscription beforehand and bid accordingly.
EG: If a person bids for 10 shares in retail category and the issue is oversubscribed 2 times, he wiill get only 5 shares.
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How do you deal with oversubscription of shares and what will be the accounting entry?
Based on australian standards. Dr application of shares Cr Cash Trust
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