LIMITED COMPANIES

SO FAR , WE CONSIDERED

• Why growth of limited companies
• Benefits in terms of more capital and liability limited to amount of shares invested
• Public vs private companies
• Types of share capital
• Ordinary shares vs preference shares
• Capital vs revenue reserves
• Dividend calculation for preference ,differs for ordinary dividend

LEARNING OUTCOMES FOR TODAY

• Interim vs final dividend for preference
• Interim vs final dividend for ordinary shareholders
• Correction of exercise on dividend
• Debentures explanation
• Equity components of a company
• Income statement of a company
• Statement of changes in equity
• Statement of financial position
• Redeemable vs non-redeemable preference shares

DEBENTURES

DEBENTURES

• Same as a loan- a non-current liability
• Debenture holders - fixed rate of interest
• Debenture interest will feature under finance cost in ‘statement of profit or loss’
• Priority for repayment on liquidation
• No voting rights
• Debenture interest calculated same as loan interest
• Rate * amount of debentures

LET US CONSIDER THE FINAL ACCOUNTS OF COMPANIES

EQUITY ITEMS IN STATEMENT OF FINANCIAL POSITION

• Ordinary share capital
• Non-redeemable preference share capital
• General reserve
• Retained earnings

REDEEMABLE VS NON-REDEEMABLE