Authorized capital (UK) - the amount of funds that was contributed by the participants of the organization and entered into the constituent documents after state registration. The funds allocated to this fund are continuously accounted for in account 80. In case of changes in its size, they make up the postings on the authorized capital, which are considered in the article.
Account structure 80
An accounting entry is a record of correspondence between two accounts for the amount of change in their quantitative characteristics. To correctly describe the process of the operation, it is necessary to know exactly the structure of the interacting elements. Account 80 - describes the sources of funds of the enterprise, and, therefore, in relation to the balance sheet has a passive structure. If money increases in the authorized capital fund, the correspondence will indicate credit account 80, with a decrease - debit.
At the end of the month, a unilateral credit balance is formed, which is reflected in the balance sheet regarding liabilities and statement of changes in equity. It is not difficult to organize accounting on account 80: transactions on the authorized capital are easy and effortless.
What does account 80 count?
The second important point in knowledge before drawing up postings is an understanding of what exactly and where it is taken into account. Does this amount really have to be paid into the N account? Maybe her place in a completely different document? There should be no doubt. On account 80, the accountant must consider the following amounts:
- authorized capital created by AO or LLC;
- share capital, which is formed in partnerships on faith or full partnerships;
- statutory fund, opened upon the formation of a municipal or state enterprise at business law;
- contributions of partners if the company is a party to a joint venture agreement.
It turns out that the postings to the authorized capital are carried out only when its amount is changed by issuing a share to the shareholder, accepting a deposit or by decision of the founders.
Formation of the authorized capital of a commercial entity
Legal entities, creating commercial enterprises, without fail declare the authorized capital, the data on which is contained in the constituent documents. Additionally, an agreement is created between investors, which details repayment periods, forms of contributions, and the founders.
The authorized capital at the opening of a new legal entity is the amount of money with which the company "starts" in economic relations. Accounting entries of the authorized capital will be the first entries: Dt 75 Ct 80 for the corresponding amount. A record means that capital has been generated but not yet paid by the founders. After making the required amounts score 75 It is credited by interconnecting with asset accounting accounts used by the shareholder (money, fixed assets, materials, etc.).
Contribution to share capital: postings
Contribution to the UK can be made in the form of cash or property (fixed assets, inventories, inventory materials, intangible assets). In the case of payment by the founder of the amount of the authorized capital, the accountant shall record:
- Dt "Settlements with the founders" Kt "Share capital" - the amount of the contribution has been announced.
- Dt "Settlement account" ("Cashier") CT "Settlements with founders" - paid a contribution to the authorized capital.
The property transferred to the ownership of the enterprise is evaluated by agreement, but not lower than the market value. In cases where the transferred assets were subject to VAT and were presented to the budget, the contributor restores the tax amount in full or in part of its residual value.
Upon receipt of a contribution by property, the accountant makes the following entries:
- Dt “Materials” (or other assets accounting accounts) Kt “Settlements with founders” - received materials as a contribution to the organization’s management company.
- Dt “VAT” Kt “Settlements with the founders” - the VAT on the accepted materials was accepted for deduction.
Accounting for an increase in share capital
In the course of the enterprise, the founders may decide to increase the amount of initial capital. Why does the company need this? The size of the authorized capital can affect the decision of investors or lenders to contribute funds for the development of the enterprise or the issuance of a loan. An organization striving for success will necessarily resort to an increase in capital, and then it will be necessary to draw up appropriate entries on the authorized capital.
An important point in the acceptance and recognition of the contribution is the introduction of data on changes in the constituent documents. Only after such a procedure has been completed, it is possible to proceed to formalizing a business transaction on the account authorized capital. Postings are made according to the type of capital formation: Dt “Settlements with founders” Kt “Authorized capital”. In this case, only the debited account changes, depending on who the funds come from:
- from the founders - 75;
- from additional capital or retained earnings - 83 and 84, respectively;
- due to the conversion of stock bonds - 66, 67.
In order to avoid comments from employees of the tax inspectorate, it should be ensured that the purpose of the receipt of funds is indicated on the invoice or payment order: “contribution to the company’s asset management company”
An example of drawing up postings when increasing the authorized capital
Consider the situation with the given conditions: The authorized capital of JSC NNN is 300 thousand rubles and is divided into 125 shares (the nominal value of one is 2 thousand rubles). During the revaluation of fixed assets, it was found that their value increased by 50 thousand rubles, and the accumulation of depreciation by 10 thousand. As a result, the accountant increased the additional capital by 35 thousand rubles. Postings are made:
- Dt "OS" Kt "Additional paid-in capital" by 50 000 rubles - reflects the increase in the cost of OS.
- Dt “Additional paid-in capital” CT “Depreciation of fixed assets” by 15,000 rubles - the amount of the increase in accumulated depreciation.
JSC NNN decided to make a contribution to the authorized capital (see the transactions below) in the amount of 35 thousand rubles. The organization has 125 shares, then the price of one will increase by: 35,000 ÷ 125 = 280 rubles. All shares are converted into shares worth 2280 rubles. After registering the changes, the accountant makes the posting: Dt 83 Kt 80 to 35 000 rubles.
Decrease in share capital
The founders have the right not only to increase the amount of the authorized capital, but also to reduce it. There is also a legal requirement, according to which the value of the net assets of AO should not be less than the size of the authorized capital. Net assets are calculated by calculating the difference between the funds and liabilities of the organization according to the annual balance sheet.
On the debit the account "Authorized capital" decreases. Postings can be made in this way:
- Dt “Authorized capital” Kt “Settlements with the founders” - CC decreased due to its incomplete payment (declared capital must be paid during the year).
- Dt "authorized capital" "Retained earnings" - the size of the authorized capital is reduced to match the size of the net assets of the organization.
- Dt “Authorized capital” Kt “Own shares” - a part of the shares that were repurchased from participants of the joint-stock company was canceled
In an enterprise organized under a simple partnership agreement, after completion of the joint activity, the participants shall return the property entered into the Asset Management Code by posting: Dt 80 Kt 01 (other asset accounts).
Authorized capital - the actual amount of funds that the company will have at the beginning of the organization of its activities. Postings to account 80, characterizing the movement of funds of the authorized capital, should be performed only after amendments to the constituent and other documents.
