Susan Coomer Galbreath, Ph.D., CPA Charles W. Caldwell, D.B.A., CMA Jon A. Booker, Ph.D., CPA, CIA Cynthia J. Rooney, Ph.D., CPA
Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.
The Nature of Shareholders’ Equity
Assets – Liabilities = Shareholders’ Equity
Net Assets Sources of Shareholders’
Amounts invested by shareholders
Equity Amounts earned by corporation
Shareholders’ Equity Paid-in Capital
Accumulated Other Comprehensive Income
Other gains and losses not included in net income
Accumulated Other 18-3 Comprehensive Income
Accumulated other comprehensive income includes four types of gains and losses not included in net income.
Net holding gains (losses) on investments.
Gains (losses) from and amendments to postretirement benefit plans.
Deferred gains (losses) from
Gains (losses) from foreign currency translations.
Accumulated Other 18-4 Comprehensive Income
Comprehensive income is reported periodically as it is created and also is reported as a cumulative amount.
There are 2 options for reporting comprehensive
income created during the reporting period.
The accumulated amount of comprehensive income is
reported as a separate item of shareholders’ equity in
the balance sheet.
As an additional
section of the income
As a separate statement
following the income statement
The Model Business Corporation Act
Nature and location of business activities.
Number and classes of shares authorized.
Articles of incorporation are filed with the state.
State issues a corporate charter.
Shares of stock issued.
Board of directors appoint officers.
Board of directors elected by shareholders.