International accounting standards 11 Flashcards
Three primary forms of business organization:
- proprietorship
- partnership
- corporation
Characteristics that distinguish (odróżniające) corporations from proprietorships and partnerships:
- separate legal existence
- transferable ownership rights
- continuous life
- government regulations
- limited liability of shareholders
- ability to acquire capital
- corporate management
- additional taxes
propietorship (znaczenie)
działalność gospodarcza
partnership (znaczenie)
spółka osobowa
legal entity (znaczenie)
osoba prawna
Shareholders rights in corporation:
- vote in election of board of directors at annual meeting and vote on actions that require shareholder approval
- share the corporate earnings through receipt of dividends
- Keep the same percentage ownership when new shares are issued (preemptive right).
- Share in assets upon liquidation in proportion to their holdings. This is called a residual claim
insuance (znaczenie)
emisja
When a corporation decides to issue shares, it must resolve a number of basic questions:
- How many shares should it authorize for sale? (ile udziałów jest możliwe do sprzedania)
- How should it issue the shares?
- What value should the corporation assign to the shares?
Authorized Shares:
- Charter indicates amount of shares that a corporation is authorized to sell
- Number of authorized shares is often reported in equity section
- No formal accounting entry
Issued shares:
- Shares sold to investors
Outstanding shares (wyemitowane akcje)
- Shares in the hands of investors
Equity is identified by various names:
- stockholders’ equity,
- shareholders’ equity, or
- corporate capital
The equity section of a corporation’s balance sheet shows:
- share capital and
- retained earnings (earned capital).
Share Capital
Share capital is the total amount of cash and other assets paid in to the corporation by shareholders in exchange for shares.
Retained Earnings
Net income that a corporation retains for future use.
Par value:
- Par value determined legal capital per share that a company must retain in business for protection of corporate creditors
- Today many governments do not require (wymagać) a par value
- No-par value shares is fairly common today
- In many countries, a stated value is assigned to no-par shares
Primary Objective
Primary Objective is to identify the specific sources of capital
Issuing Par Value Ordinary Shares for Cash (znaczenie)
Emisja akcji zwykłych o wartości nominalnej za gotówkę
Issuing Par Value Ordinary Shares for Cash:
- Par value does not indicate a share’s market price
- Cash proceeds from issuing par value shares may be equal to, greater than, or less than par value
- Issuance of ordinary shares for cash: Credit par value of shares to Share Capital—Ordinary, Record in a separate account portion of proceeds that is above or below par value
Corporations also may issue shares for:
- Services (attorneys or consultants)
- Non-cash assets (land, buildings, and
equipment)
Cost is either the fair market value of the consideration given up, or the fair market value of the consideration received, whichever is more clearly determinable
Preference shares (znaczenie):
akcje uprzywilejowane
Dividend Preference:
- Distributions of earnings (dividends).
- Generally non- voting rights.
Voting preference:
- More than one vote per share
- No dividend preference
What are treasury shares?
Treasury shares are a corporation’s own shares that it has reacquired (ponownie nabyte) from shareholders but not retired. (nie wycofane)
