LLC SOFP Terminology Flashcards
What is authorised share capital?
It is the maximum share capital that a company can issue.
What is issued share capital?
It is the amount of share capital that a company has issued. Shown at nominal value.
Why are capital reserves created?
Because of non-trading profit.
When is revaluation reserve created?
When a non-current asset is revalued at a higher value than previously shown.
When is share premium account created?
When shares are issued at a higher amount than their nominal value.
What are revenue reserves?
Accumulated profits from trading activities that are kept in company rather than paid out to shareholders. Only reserve is retained earnings.
What does nominal value mean?
Face value of shares shown on sofp as part of total equity.
What does market value mean
Price at which shares that have been previously issued are traded.
