Wiley GAAP 2014: Interpretation and Application of Generally Accepted Accounting Principles

35   ASC 505 EQUITY

Perspective and Issues

Subtopics

Scope and Scope Exceptions

Overview

Definitions of Terms

Concepts, Rules, and Examples

Legal Capital and Capital Stock

Preferred stock

Issuance of shares

Example—Treatment of par and no-par stock in a stock sale

Stock Subscriptions

Example of stock subscription transactions

Additional Paid-in Capital

Example of additional paid-in-capital transactions

Donated Capital

Example of donated capital

Retained Earnings

Examples of retained earnings transactions

Dividends

Example of dividends

Property dividends

Scrip dividends

Liquidating dividends

Stock dividends

Example of small stock dividend

Example of large stock dividend

Distributions to shareholders having cash and stock components

Treasury Stock

Cost method

Par value method

Constructive retirement method

Example of accounting for treasury stock

Example of the cost and par value methods

Other Paid-in Capital Issues

Takeover defense as cost of treasury stock

Accelerated share repurchase programs

Own-share lending arrangements related to convertible debt financing

Other Equity Accounts

Accounting for Equity Instruments Issued to Other than Employees

Measurement date

When to recognize the fair value of the equity instruments

Accounting prior to measurement date

Measurement of fair value of the equity instrument portion of the transaction when certain terms are not known at inception

Example of equity instruments issued to a third party

Reporting prior to the measurement date when certain ...