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SFAS
No. 129
Statement of Financial Accounting Standards
(SFAS) No. 129
a.
Disclosure of Information about Capital Structure
b. Issued in February 1997
SFAS No. 129
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Consolidates
capital structure related disclosures
required by APB Opinion No. 10, 15
and SFAS No. 47.
Required
Disclosures
about Securities
a. Dividend and liquidation preferences
b.
Participation rights
c. Call
prices and dates
d. Conversion
rates and dates
e. Exercise
prices and dates
f.
Sinking-fund requirements
g. Unusual
voting rights
h. Contracts
to issue additional shares
i.
Number of shares issued on conversion or exercise
j.
Changes in the number of shares of stock
k.
Liquidation preference for preferred stock
l.
Amounts at which preferred stock may be called
m. Amounts at
which preferred stock is subject to redemption
n. Amounts of
arrearages in cumulative preferred dividends
o. Amount of
redemption requirements for redeemable stock
Preferred Stock
--> A security with preferential rights (compared to common stock)
Participation Rights
--> Rights to receive dividends or returns
APB
Opinion No. 12
Disclosures of Changes
in Capital Accounts
a. Changes in
the accounts comprising stockholders' equity
b. Changes in
the number of shares of stock
ARB
No. 43, Chapter 1A
Stock Issued for
Property
--> It is not permissible to treat
the par value of stock issued
as the cost of property acquired.
APB
Opinion No. 14
Debt with stock detachable purchase warrants
--> Proceeds are allocated to the two components.
a. debt security
b. warrants
Allocation is based on
--> a. fair value of debt securities without warrants
b. fair value of warrants
Portion of proceeds allocated to debt
security
--> recorded as liability.
Portion of proceeds allocated to warrants
--> recorded as additional paid-in capital.
APB
Opinion No. 29
Cost
of an asset acquired
= Fair value of the
asset surrendered
+ Cash (boot) paid
- Cash (boot) received
Dividend-in-kind
--> recorded at the fair value of the asset transferred
--> gain or loss is
recognized on the disposition of the asset.
ARB
No. 43, Chapter 7B
Stock Dividend
--> Issuance of its own stock to shareholders
without consideration
--> to distribute
retained earnings to shareholders.
Accounting for Stock Dividend
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Retained earnings is transferred
to capital stock and additional paid-in capital
--> for the
amount of
fair value of additional shares
issued
Stock Split
--> Issuance of its own stock to shareholders
without consideration
--> to reduce per
share price
by increasing number of outstanding shares.
Accounting for
Stock Split
--> Retained
earnings is not transferred to capital stock.
Issuance of additional
shares of more than 25 percent
--> Recorded as stock splits.
APB
Opinion No. 6
Treasury Stock
--> Capital stock acquired (and held)
by the entity that issued such stock.
Treasury stock is
--> reported separately
as a deduction from the total of
(capital stock, additional paid-in capital, and retained earnings.)
Gains on Sales of
Treasury stock
--> credited to additional paid-in capital.
Losses on Sales of
Treasury stock
--> charged to additional paid-in capital
(up to previous gains on sales of same class of stock)
--> remaining
losses are
charged to retained earnings.
Retirement of Treasury
Stock
An excess of purchase price over par (or stated) value
--> charged to
additional paid-in capital (limited to pro rata portion)
and retained earnings.
Alternatively,
--> may be charged
(entirely)
to retained earnings.
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