Flashcards in Stockholders Equity Deck (25):
APIC for each is allocated by its respective % of the total FMV of the shares x the proceeds.
APIC increases on date subscription is recorded - not on the date paid for or issued
It will be restricted to the extent of the balance in the Treasury Stock account.
They are not accrued until declared.
If a year passes and no Cumulative Preferred Stock is declared- then the dividends in arrears are included as a disclosure - not an accrual in the Financial Statements.
The gain or loss is the difference between the FMV of the asset distributed at the date of distribution and its carry amount on the company's books
The effect on Retained Earnings is the Carrying Amount of the asset
RE will be debited when the dividend is declared for the FMV of the asset- which is more (or less) than the carrying amount
Gain/Loss recorded when the asset is distributed will offset the original effect of the debt to RE and will be a wash
The net effect of the entry is that RE will decrease by the CV of the asset
When Stock Dividend is less than 25% of Common Stock outstanding
When Stock Dividend is greater than 25% of common stock outstanding
Stock dividends and stock splits both have no effect on Total Shareholder Equity
Stock splits only affect par value - APIC remains the same.
Compensation expense is recorded at the time of grant if options are exercisable immediately
They are based on past service.
Expense recognized : FV Stock Option x # of Shares
The risk-free interest rate
The settlement date.
Compensation costs for share-based payments classified as liabilities are measured by the change in the fair value of the instrument for each reporting period
Net increase to SHE : Gain on settlement of debt + Credit to SHE from stock issuance
To eliminate a deficit balance in RE by restating its assets to Fair Value
It does not directly protect a company from its creditors
(Net Income - P/S Dividends) / Average Common Stockholders Equity
Note: Average CSE : Common Stock + RE
Total Common Stock
- Total Preferred Stock
- P/S Dividends in Arrears
- P/S Liquidation Premium
:Total Book Value
Book Value per Share : Total Book Value / Shares outstanding
Dividends per share / earnings per share
(Net Income - Preferred Dividends) / Average C/S Outstanding
Note - If cumulative- subtract the P/S dividend regardless of whether or not they're declared.
For EPS purposes- treat C/S stock splits or stock dividends as if they occurred at the beginning of the year- regardless of when actually issued during the year
EPS is only required to be shown for Income from Continuing Operations and Net Income.
All others (discontinued operations- extraordinary items) can be shown on the Financial Statements or in the notes
Only if they are dilutive.
Their exercise price is LESS than the market value
If not- you ignore them in the calculation