Accounting Summary

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SHAREHOLDER’S EQUITY * Owner’s equity section of a corporation’s statement of financial position; 2 major components – share capital and retained earnings. * SHARE CAPITAL – amount of resources received by a corporation as a result of investment by shareholders, donations or other share capital transactions * RETAINED EARNINGS – amount of capital accumulated and retained through the profitable operations of the business. SHARE CAPITAL * Shares to be subscribed and paid in or secured to be paid in by shareholders, either in money, property or services, at the time of organization of the corporation or afterwards, and upon it’s to conduct its operations Divided into – legal capital and share premium * LEGAL CAPITAL – capital…show more content…
| Cash-Settled | Entity received goods or services by incurring liabilities for amounts based on the value of its own equities. | Equity-Settled with Cash Alternative | Entity received goods or services and the entity or the supplier has the choice of whether the transaction is settled in cash or equity instruments. | Measurement a. Share-based payments to non-employees are measured at fair value of the goods or services received. b. Share-based payments to employees including share options, the transaction should be measured at the fair value of the equity instruments granted because the fair value of the service provided by the employees generally is not reliably measurable. Fair value – amount which an asset can be exchanged, liability settled or an equity instrument granted could be exchange between knowledgeable and willing parties in an arm’s length transaction. Fair value is determined using the3-tier measurement hierarchy - observable market prices if available, market data with reference to a recent transaction in the entity’s shares or a recent independent fair valuation of the entity or its principal assets. DEFINITION OF TERMS: * Grant date – date at which the entity and another party agree to a share-based payment arrangement * To vest – to become an entitlement * Vesting period - period
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