Acca financial Accounting (FA) Study Text ac ca (FA)

Other terminology to be aware of 

•

Issued

 share capital is the share capital that has actually been

issued to shareholders. The number of issued shares is used in the

calculation of dividends.

•

Called-up

 share capital is the amount of the nominal value paid by

the shareholder plus any further amounts that they have agreed to

pay in the future.

•

Paid up

 share capital is the amount of the nominal value which has

been paid at the current date.

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Chapter 13 

KAPLAN PUBLISHING

223 

Accounting for the issue of shares 

If a company did issue shares at their nominal value the double entry to record 

this raising of finance would be: 

Dr Cash 

$X  Issue price × no. of shares 

Cr Share capital 

$X  Nominal value × no. of shares 

In reality companies generally issue shares at a price above their nominal 

value. This is referred to as issuing shares at a premium. 

The double entry to record such an issue is: 

Dr Cash 

$X  Issue price × no. of shares 

Cr Share capital 

$X  Nominal value × no. of shares 

Cr Share premium 

$ß   (i.e. the difference between the issue price and 

the premium nominal value × no. of shares 

sold). 

Both the share capital and share premium accounts are shown on the 

statement of financial position within the 'Equity' section.