Save Rs 499 on a 2-Year Ad-Free CAclubindia Pro Membership. Subscribe Now!

Mentioning equity shares in Balance sheet

505 views

Save Share

Join Us Follow Us Add as Source

Jayanta Bandyopadhyay

414 Points Posted on 28 September 2024

(a) Equity shares of Rs.10 each with voting rights

Is it mandatory to write this fashion elsewhere in annual report?

(b) Company is making continuous loss over 3 years- should we tell auditors to mentuon this in report?

Replies (2)

Quick Summary

This discussion clarifies the reporting of equity shares on a balance sheet. While the face value and voting rights of shares (e.g., "Rs. 10 each with voting rights") must be clearly stated in the Share Capital note, it's not always required elsewhere in the annual report unless contextually relevant. The thread also touches upon whether continuous company losses over three years should be mentioned in the auditor's report.

Adhiti Mehta

ACCA student

44 Points Posted on 28 September 2024

In financial statements, particularly the notes to accounts section, the presentation of equity share capital is typically done in a standardized format. It's not always mandatory to specify "Rs. 10 each with voting rights" in every section of the annual report, but it should be clearly mentioned in sections that describe share capital.

In the Balance Sheet or Notes: The face value of shares and voting rights should be mentioned clearly, especially in the "Share Capital" note.
Elsewhere in the report (like the director’s report): It's not necessary to mention the face value or voting rights unless it is particularly relevant to the context, such as during a rights issue or an extraordinary corporate action.

I have learned this after taking admission in ACCA.