Ordinary Shares

Code: 3111
👁 Views: 39

Account Information

Account Type Statement of Financial Position
Normal Balance Credit

Definition

Ordinary shares issued to shareholders with equal voting rights and distributions

Common Journal Entries

Issue new ordinary shares

Dr. Bank Account
Cr. Ordinary Shares

Issue shares with premium

Dr. Bank Account
Cr. Ordinary Shares
Cr. Share Premium

Issue bonus shares

Dr. Retained Earnings
Cr. Ordinary Shares

Buy back treasury shares

Dr. Treasury Shares
Cr. Bank Account

Issue new ordinary shares

Dr. Bank Account
Cr. Ordinary Shares

Issue shares with premium

Dr. Bank Account
Cr. Ordinary Shares
Cr. Share Premium

Issue bonus shares

Dr. Retained Earnings
Cr. Ordinary Shares

Buy back treasury shares

Dr. Treasury Shares
Cr. Bank Account

International Accounting Standards

IFRS IAS 32 Financial Instruments: Presentation

Classified as equity if no contractual obligation to deliver cash. Par value concept not required.

US GAAP ASC 505 Equity

Par value system commonly used. Legal capital concept important.

⚠ Key Difference: IFRS vs GAAP

GAAP emphasises par value; IFRS does not require it