ACCOUNTING TREATMENT AND FINANCIAL REPORTING OF CAPITAL PREMIUMS
ACCOUNTING TREATMENT AND FINANCIAL REPORTING OF CAPITAL PREMIUMS

Summary/Abstract: In this article, a study is carried out on the accounting treatment of capital premiums. The following research aims to identify the essence of capital premiums (included in the national accounting regulation from 01.01.2020), the transactions that lead to the appearance of this patrimonial element, how to make accounting entries and financial reporting. The study is based upon scientific research methods, namely: the analysis of the legal framework governing the study, the information analysis, the comparison in order to identify distinctive features, the deduction of challenges. The study presents the accounting records for all situations that determine capital premiums both theoretically and through practical situations. The results of the research identified the existence of 2 terms in the regulation of the Republic of Moldova, namely: in the accounting regulation - capital premiums, in the Law on joint-stock companies - additional capital, which can lead to confusion both in the recognition and in the examination of the financial indicator for economic decision-making, which determines a need for unification within the regulations. The result of the study shows that the capital premiums are generated by the transactions related to the share capital, however, the correspondence of the accounting account of capital premiums is made with the accounting account related to the unpaid capital - at the establishment of the entity, with the accounting account related to the unregistered capital - when the share capital is increased and the conversion of bonds into shares, and also with the capital accounting account withdrawn upon the cancellation or resale of shares. The research results presented in the study contain the accounting records on the situations that determine the capital premiums and their financial reporting.

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