ARB 43 and ASC 505-20 say that no entry reqd for stock split up

k.sankar.ra
Good Student
Posts: 14
Joined: Sat Mar 26, 2016 4:33 am

ARB 43 and ASC 505-20 say that no entry reqd for stock split up

Postby k.sankar.ra » Sun Aug 07, 2016 9:36 am

In Page A-73 of CMA Part I of Becker's Study Notes, there are 2 kinds of stock dividends, small (< 20% to 25%) and big (not < 20% to 25%)
But, as per paragraphs 13 and 16 of Section B of ARB 43,
a) the small stock issues (<20% to 25% of previously outstanding stocks) will be deemed to be stock dividends, and
b) the big stock issues (not <20% to 25% of previously outstanding stocks) will be deemed to be stock split-ups.

As per paragraph 15 of ARB 43, for the big stock split-up issues, there will be no transfer entry required from retained earnings to capital stock & surplus.
But, in contrast, Becker study notes page A-73 says,
Retained earnings a/c Dr With the amount of
Capital stock a/c Cr par values

Can you clarify this please ?

Regards
Ra K Sankar

Return to “CMA”



cron

Disclaimer

Global Association of Risk Professionals, Inc. (GARP®) does not endorse, promote, review or warrant the accuracy of the products or services offered by EduPristine for FRM® related information, nor does it endorse any pass rates claimed by the provider. Further, GARP® is not responsible for any fees or costs paid by the user to EduPristine nor is GARP® responsible for any fees or costs of any person or entity providing any services to EduPristine Study Program. FRM®, GARP® and Global Association of Risk Professionals®, are trademarks owned by the Global Association of Risk Professionals, Inc

CFA Institute does not endorse, promote, or warrant the accuracy or quality of the products or services offered by EduPristine. CFA Institute, CFA®, Claritas® and Chartered Financial Analyst® are trademarks owned by CFA Institute.

Utmost care has been taken to ensure that there is no copyright violation or infringement in any of our content. Still, in case you feel that there is any copyright violation of any kind please send a mail to abuse@edupristine.com and we will rectify it.