- This topic has 2 replies, 3 voices, and was last updated 5 years ago by
.
- Posts
A company forming up by two shareholders of one contributing cash and the other contributing creation and development. Both of them share the share issued equally (50%).
Says,
A contribute £100 cash, will be given 100 shares
B contribute creation and development, will be alloted 100 shares
At the reporting date, the share capital registed with registrar is 200 paid up share capital.
How would this be accounting? Can this be recognise into intangible assets?In most jurisdictions (certainly in the UK) on company formation shares can only be given for cash and certain assets (that may require independent valuation). Share capital – which remember is a “creditors buffer” – cannot be issued in exchange for a promise of future services.
(You don’t need to know for FR but in SBR you will encounter accounting for share-based payments. When employees (for example) are given share options – the recognition of capital depends on the employees having given past service – not possible future service.)Share capital consists of all funds raised by a company in exchange for shares of either common or preferred shares of stock. You can easily share your capital and raise funds for your factoring company (https://www.prestigecapital.com/) from the financial firm like Prestige Capital Corporation.
- You must be logged in to reply to this topic.