Skip to main content
SpringerLink
Log in

Capital instruments

  • Chapter
UK Gaap

  • 115 Accesses

Abstract

The accounting treatment of capital instruments — shares and debt securities — by their issuer has not until recently been thought of as presenting significant problems in the UK, and no accounting standards have so far been developed on the subject, although one is now in prospect. The distinction between share and loan capital has always been based on the legal form of the instrument, which again has not traditionally been an area of any concern, and company law has similarly governed their treatment and disclosure in the accounts. However, in recent years there has been substantial development of innovative forms of finance, and some of these new instruments have caused the accounting profession to question whether the conventional framework for accounting for share and loan capital remains adequate.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Log in via an institution
eBook
USD 16.99
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. Accounting for capital instruments, ASB, December 1991.

    Google Scholar 

  2. The elements of financial statements, Discussion Draft of Chapter 3 of the Statement of Principles, ASB, July 1992.

    Google Scholar 

  3. Accounting for capital instruments, para. 2.26.

    Google Scholar 

  4. Operating and Financial Review, ASB, April 1992, para. 16.

    Google Scholar 

  5. CA 85, s. 130(1).

    Google Scholar 

  6. Ibid., s. 130(2).

    Google Scholar 

  7. Ibid., ss. 131 and 132.

    Google Scholar 

  8. Ibid., ss 117 and 118.

    Google Scholar 

  9. SSAP 17, Accounting for post balance sheet events, ASC, August 1980, para. 11.

    Google Scholar 

  10. CA 85, Sch. 4, para. 24.

    Google Scholar 

  11. Accounting for capital instruments, paras. 3.25 to 3.30.

    Google Scholar 

  12. CA 85, Sch. 4, para. 8.

    Google Scholar 

  13. Ibid., para. 38(1).

    Google Scholar 

  14. Ibid., para. 38(2).

    Google Scholar 

  15. Ibid., para. 39.

    Google Scholar 

  16. Ibid., para. 40.

    Google Scholar 

  17. Ibid., para. 49.

    Google Scholar 

  18. Ibid., para. 3(7)(b).

    Google Scholar 

  19. Ibid., para. 51(3).

    Google Scholar 

  20. The Council of the Stock Exchange, Admission of Securities to Listing, Section 5, Chapter 2, para. 21(i). and The Stock Exchange Unlisted Securities Market, General Undertaking, para. 10(i).

    Google Scholar 

  21. CA 85, Sch. 4, para. 8.

    Google Scholar 

  22. Ibid., para. 85.

    Google Scholar 

  23. Ibid., para. 48(1)(a).

    Google Scholar 

  24. Ibid., para. 48(1)(b).

    Google Scholar 

  25. Ibid., para. 48(2).

    Google Scholar 

  26. Ibid., para. 48(4).

    Google Scholar 

  27. Ibid., para. 41(1).

    Google Scholar 

  28. Ibid., para. 41(2) and (3).

    Google Scholar 

  29. Ibid., s 744.

    Google Scholar 

  30. Ibid., para. 53(2).

    Google Scholar 

  31. The Council of the Stock Exchange, Admission of Securities to Listing, Section 5, Chapter 2, para. 21(f). and The Stock Exchange Unlisted Securities Market, General Undertaking, para. 10(f).

    Google Scholar 

  32. CA 85, ss. 159–181.

    Google Scholar 

  33. Ibid., s. 171 et seq.

    Google Scholar 

  34. Ibid., Sch. 7, paras. 8 & 9.

    Google Scholar 

  35. The Council of the Stock Exchange, Admission of Securities to Listing, Section 5, Chapter 2, para. 21(p).

    Google Scholar 

  36. SSAP 21, Accounting for leases, ASC, August 1984, para. 37.

    Google Scholar 

  37. Accounting for Capital Instruments, Appendix 1.

    Google Scholar 

  38. UITF Information Sheet No. 1, 13 March 1992.

    Google Scholar 

  39. TR 677, Accounting for complex capital issues, ICAEW, November 1987, Appendix para. 2.

    Google Scholar 

  40. Accounting for Capital Instruments, para. 3.37.

    Google Scholar 

  41. Ibid., para. 2.37.

    Google Scholar 

  42. Ibid., para. 4.7.

    Google Scholar 

  43. Ibid., para. 4.8.

    Google Scholar 

  44. Ibid., para. 4.11.

    Google Scholar 

  45. CA 85, s. 130.

    Google Scholar 

  46. UITF Abstract 1, Convertible bonds — Supplemental interest/premium, ASB, 24 July 1991, para. 5(a).

    Google Scholar 

  47. Accounting for Capital Instruments, Appendix 3.

    Google Scholar 

  48. E40, Financial Instruments, IASC, September 1991, para. 25.

    Google Scholar 

  49. TR 677, Appendix para. 5(a).

    Google Scholar 

  50. UITF 1, para. 5.

    Google Scholar 

  51. Accounting for Capital Instruments, Appendix 1.

    Google Scholar 

  52. Ibid.

    Google Scholar 

  53. Ibid.

    Google Scholar 

  54. Staff Accounting Bulletin No. 68, SEC, April 1987.

    Google Scholar 

  55. Accounting for Capital Instruments, para. 3.46.

    Google Scholar 

  56. Ibid., para. 3.47

    Google Scholar 

  57. TR 677, Appendix para. 7.

    Google Scholar 

  58. Statement S-X, SEC, para. 3–04.

    Google Scholar 

  59. APB 15, Earnings per share, para. 50, footnote 16.

    Google Scholar 

  60. SFAS 5, Accounting for contingencies, para. 18.

    Google Scholar 

  61. SFAS 6, Classification of Short-Term Obligations expected to Be Refinanced, paras. 8–11.

    Google Scholar 

  62. Ibid., para. 15.

    Google Scholar 

  63. SFAS 78, Classification of Obligations That Are Callable by the Creditor, para. 5.

    Google Scholar 

  64. Statement S-X, SEC, para. 5–02.19–20.

    Google Scholar 

  65. Ibid., para. 5–02.23.

    Google Scholar 

  66. Ibid., para. 12–10.

    Google Scholar 

  67. Ibid., para. 5–02.20.

    Google Scholar 

  68. SFAS 47, Disclosure of Long-Term Obligations, para. 10.

    Google Scholar 

  69. APB 14, Accounting for Convertible Debt and Debt Issued with Stock Purchase Warrants, March 1969, para. 12.

    Google Scholar 

  70. Ibid., para. 16.

    Google Scholar 

  71. EITF Issue No. 85–29.

    Google Scholar 

  72. E40, Financial Instruments, IASC, September 1991, para. 4.

    Google Scholar 

  73. Ibid.

    Google Scholar 

  74. Ibid.

    Google Scholar 

  75. Ibid.

    Google Scholar 

  76. Ibid.

    Google Scholar 

  77. Ibid.

    Google Scholar 

  78. Ibid.

    Google Scholar 

  79. Ibid., para. 38 et seq.

    Google Scholar 

  80. Ibid., para. 44.

    Google Scholar 

  81. Ibid., para. 47.

    Google Scholar 

  82. Ibid., para. 118.

    Google Scholar 

  83. Ibid., para. 119.

    Google Scholar 

  84. Ibid., paras. 62 and 63.

    Google Scholar 

  85. Ibid., para. 140. This applies unless the liability is hedging a contractual commitment.

    Google Scholar 

  86. Ibid., para. 104.

    Google Scholar 

  87. Ibid., para. 170.

    Google Scholar 

  88. Ibid., paras. 145 — 155.

    Google Scholar 

  89. Ibid., para. 156.

    Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Ernst & Young, USA

    Mike Davies, Ron Paterson & Allister Wilson

Authors
  1. Mike Davies
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Ron Paterson
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Allister Wilson
    View author publications

    You can also search for this author in PubMed Google Scholar

Copyright information

© 1992 Ernst & Young

About this chapter

Cite this chapter

Davies, M., Paterson, R., Wilson, A. (1992). Capital instruments. In: UK Gaap. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-12998-0_12

Download citation

Publish with us

Policies and ethics

Search

Navigation