The balance of the Share Forfeiture Account will be shown in the Balance Sheet of the Company, under the head of :

When shares are forfeited due to non-payment of calls, the amount already received from the defaulting shareholder is transferred to the Share Forfeiture Account.

This account balance represents the capital amount that was paid by shareholders before their shares were forfeited. Since this amount:

• Was received as capital contribution
• Is not a liability (company doesn't owe it to anyone)
• Relates directly to share capital transactions

It is shown in the Balance Sheet under the main head "Share Capital" as an addition to the existing share capital.

The presentation in the Balance Sheet appears as:

Equity and Liabilities

• Shareholders' Funds
  • Share Capital
    • Equity Share Capital: ₹xxx
    • Add: Share Forfeiture Account: ₹xxx

When forfeited shares are later reissued:

• Any profit on reissue (Forfeiture amount > Discount on reissue) remains in Share Forfeiture Account and is transferred to Capital Reserve
• Any loss on reissue (Discount on reissue > Forfeiture amount) is debited to Share Forfeiture Account

Until reissue occurs, the balance continues to be shown as an addition to Share Capital, not as a separate reserve or liability.