After studying this chapter, you should be able to: Discuss the characteristics of the corporate form of organization, rights of shareholders, and different types of shares; explain how to account for the issuance, reacquisition, and retirement of shares, stock splits, and dividend distribution; understand the components of shareholders’ equity and how they are presented;. | 1 CHAPTER 15: SHAREHOLDERS’ EQUITY 2 CHAPTER 15: Shareholders’ Equity After studying this chapter, you should be able to: Discuss the characteristics of the corporate form of organization, rights of shareholders, and different types of shares. Explain how to account for the issuance, reacquisition, and retirement of shares, stock splits, and dividend distribution. Understand the components of shareholders’ equity and how they are presented. Understand capital disclosure requirements. Calculate and interpret key ratios relating to equity. Identify the major differences in accounting between ASPE and IFRS, and what changes are expected in the near future. 3 3 Primary Forms of Business Organization Proprietorship Partnership Corporation Not-for-profit No shares issued; created to provide services for members or society Profit-oriented Engaged in making financial returns for their owners Shares publicly traded Shares privately held Private Sector Public Sector Crown Created by government statute to provide public services Municipalities, Cities, Etc. 4 4 LO1 Discuss the characteristics of the corporate form of organization, rights of shareholders, and different types of shares. Corporate Law Articles of Incorporation Corporation Charter Issued Corporation Recognized as Legal Entity 5 5 LO1 Discuss the characteristics of the corporate form of organization, rights of shareholders, and different types of shares. Corporate Law The Canada Business Corporation Act (CBCA) is a relevant business corporation act Provincial business corporation acts also exist but vary from province to province Articles of incorporation prepared and submitted Company name Location of registered office Classes and authorized shares Share transfer restrictions (if any) Directors Business restrictions 6 6 LO1 Discuss the characteristics of the corporate form of organization, rights of shareholders, and different types of shares. Share Capital System Shares grouped by “class” (. Class A Common) | 1 CHAPTER 15: SHAREHOLDERS’ EQUITY 2 CHAPTER 15: Shareholders’ Equity After studying this chapter, you should be able to: Discuss the characteristics of the corporate form of organization, rights of shareholders, and different types of shares. Explain how to account for the issuance, reacquisition, and retirement of shares, stock splits, and dividend distribution. Understand the components of shareholders’ equity and how they are presented. Understand capital disclosure requirements. Calculate and interpret key ratios relating to equity. Identify the major differences in accounting between ASPE and IFRS, and what changes are expected in the near future. 3 3 Primary Forms of Business Organization Proprietorship Partnership Corporation Not-for-profit No shares issued; created to provide services for members or society Profit-oriented Engaged in making financial returns for their owners Shares publicly traded Shares privately held Private Sector Public Sector Crown Created by government
