Vol. 3 LM2 Components of Equity Flashcards
Define
Equity
Balance Sheet
Is the owners’ residual claim on a company’s assets after subtracting its liabilities
* FASB ASC 505-10-05-3 [Equity-Overview and Background]
Balance Sheet
Enumerate
Six main components typically comprise total owners’ equity
Balance Sheet
- Capital contributed by owners
- Preferred shares
- Treasury shares
- Retained earnings
- Accumulated other comprehensive income
- Noncontrolling interest
Balance Sheet
Define
Capital contributed by owners
Balance Sheet
The amount contributed to the company by owners.
Balance Sheet
Define
Preferred shares
Balance Sheet
Classified as equity or financial liabilties based upon their characteristics rather than legal form.
Balance Sheet
Define
Treasury shares
Balance Sheet
Shares in the company that have been repurchased by the company, and are held as treasury shares, rather being cancelled.
Balance
Define
Retained earnings
Balance Sheet
The cumulative amount of earnings recognized in the company’s income statements, which have not been paid to the owners of the company as dividends
Balance Sheet
Define
Accumulated other comprehensive income (AOCI)
Balance Sheet
The cumulative amount of other comrehensive income or loss.
Balance Sheet
Define
Noncontrolling interest (or minority interest)
Balance Sheet
The equity interests of minority shareholders in the subsidiary companies that have been consolidated by the parent (controlling) company, but that are not wholly owned by the parent company.
Balance Sheet
Preferred share classification
perpetual, non-redeemable preferred shares
Balance Sheet
Equity
Balance Sheet
Preferred share classification
preferred shares with mandatory redemption at a fixed amount at a future date
Balance Sheet
Financial liabilties
Balance Sheet
Fill in the blank
If ____ shares are subsequently reissued, a company does not recognize any gain or loss from the reissuance on the income statement.
Balance Sheet
Treasury [ Shares ]
Balance Sheet
rights and privileges
Treasury shares
Balance Sheet
- non-voting
- do not receive any dividends declared by the company
Balance Sheet
