Forums › ACCA Forums › ACCA FR Financial Reporting Forums › Terms used for shares
- This topic has 2 replies, 2 voices, and was last updated 9 years ago by emma.
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- November 9, 2014 at 12:35 pm #208563
What is the difference between ‘Equity share’ and ‘share capital’ in the F7 context? I found some questions used the term ‘equity shares’ and then ‘share capital’ in theirs answers.
November 10, 2014 at 12:02 pm #208788One possible difference,in my mind, would be that equity signifies “residual interest in assets of entity after deducting all of its liabilities”.This suggests to me the characteristics of ordinary share capital if speaking of a company entity. Other types of share capital such as preference share capital (redeemable) is in substance debt finance and must be treated as such in financial statements.Additionally,share capital with voting rights will have to be treated differently from similar capital without voting rights when dealing with some consolidation questions.
November 11, 2014 at 11:03 am #209063I think I can understand the technical terms for the said shares. It just made me curious why it termed in such specific manner for the purpose of F7, even with questions with no new issue of shares.
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