Intermediate Accounting, 15th Edition

CHAPTER 15 Stockholders’ Equity

LEARNING OBJECTIVES

After studying this chapter, you should be able to:

1. Discuss the characteristics of the corporate form of organization.
2. Identify the key components of stockholders' equity.
3. Explain the accounting procedures for issuing shares of stock.
4. Describe the accounting for treasury stock.
5. Explain the accounting for and reporting of preferred stock.
6. Describe the policies used in distributing dividends.
7. Identify the various forms of dividend distributions.
8. Explain the accounting for small and large stock dividends, and for stock splits.
9. Indicate how to present and analyze stockholders' equity.

It's a Global Market

As mentioned in prior chapters, we are moving rapidly toward one set of global financial reporting standards and one “common language” for financial information. This change will probably lead to more consolidation of our capital markets. To understand how quickly the global financial world is changing, let's examine a few trends occurring on stock exchanges around the world.

In 2007, the New York Stock Exchange (NYSE) merged with Paris-based Euronext, creating the world's first transatlantic stock exchange. NYSE Euronext is the world's largest exchange group, now with 8,000 listed issuers representing over 40 percent of global equity trading in 2010. Similarly, NASDAQ, the world's largest electronic stock market, merged with OMX, the Nordic stock market operator. This electronic exchange operates in 29 countries, on six continents, ...