1. · 1 CORPORATE FINANCIAL REPORTING Introduction & 15 - Financial Reporting Of Owners’ Equity Dilutive Securities and EPS

2. · 2 S TOCKHOLDERS’ E QUITY C OMMON S TOCK Usually considered the “real” owners of the corporation. Common stock may have par value, stated value or no-par, no-stated value, depending on the rules of the state of incorporation. Par/stated value are really meaningless.

3. · 3 S TOCKHOLDERS’ E QUITY S UBSCRIPTIONS F OR C OMMON S TOCK You have a start-up corporation that wants to raise capital. I promise to buy 1,000 shares of your corporation’s $1 par common stock for $12/share by paying 1/4 th of the price today and 1/4 th each month for the next 3 months.

4. · 4 S TOCKHOLDERS’ E QUITY P REFERRED S TOCK C OMMON F EATURES Some features of preferred stock: Rarely gets to vote Stated dividend amount or rate Preference as to dividends Cumulative Participating Convertible into common stock Liquidation preference Preferred stock may have any of these (or other) features.

5. · 5 S TOCKHOLDERS’ E QUITY D IVIDENDS Several types of dividends: Cash dividends Property dividends Stock dividends

6. · 6 S TOCKHOLDERS’ E QUITY D IVIDENDS - Dates Declaration: Dividend declared $ xxx Dividend payable $ xxx Payment: Dividend payable $ xxx Cash $ xxx Closing: Retained earnings $ xxx Dividend declared $ xxx

7. · 7 S TOCKHOLDERS’ E QUITY D IVIDENDS – Property Dividends Property dividends are non-cash asset dividends. FASB believes property dividends should be valued at fair value.

8. · 8 S TOCKHOLDERS’ E QUITY Stock Dividends and Stock Splits ◊ Stock dividends - small - large ◊ Stock splits (sometimes called “stock split-up”) - normal - split effected in the form of a stock dividend

9. · 9 S TOCKHOLDERS’ E QUITY Treasury Stock Cost method Par value method Donated to the company