Stockholders Equity Flashcards
Subscribed capital stock (calls) presented in the SFS
as a contra account in the equity section
Conversion of preferred shares
BOOK VALUE method is used
Convertible Debt
record liability at fv and residual amount to equity
Donated assets
IFRS doesn’t have any rule
Accounting for treasury stocks - 3 methods
cost, par value and
constructive retirement method-same as par but reacquired shares charged to the share account not treasury stock
Share based payments- 3 categories
equity settled
cash settled
choice to settle in cash or equity
Shareholder’s Equity components
Common stock Preference shares Share premium Reserves Treasury shares Accumulated other comprehensive income-DENTR Non controlling interests
Intrinsic value of stock options
If no observable market price of the option, compute compensation expense as:
$60 exercise price
option to purchase at 70% of exercise price
Exercise price (x% discount if there is)
minus exercise price
= intrinsic value of option
x # of options shares
= amount to record as compensation expense
Computation of contributed capital
Total all CS, PS, all APIC balances.
Do not include treasury stock transactions/journal entries in the computation
In IFRS, when preferred shares are converted into common shares, what method is used?
only book value method
Convertible bonds - how to compute for the liability?
FAIR VALUE OF THE LIABILITY COMPONENT AND THE RESIDUAL TO EQUITY COMPONENT
Declaration of dividends in IFRS
if dividends is proposed - REPORT in the notes
if declared after end of period but before the issuance of FS - DISCLOSE in the notes
ORDINARY AND PREFERRED SHARES ISSUED AS A UNIT, HOW TO ACCOUNT FOR THE VALUES?
in proportion to their relative fair values.
if only one security is valued at fv, residual is to the other security
if non, use appraisal values
Subscription receivables -
accounting depends on the jurisdiction
Current or non current asset based o n due date
OR
contra account to SE
How are DONATED ASSETS accounted for in IFRS?
NO DONATED ASSETS IN IFRS
