Possible accounting entries for authorized capital

The creation of any commercial enterprise implies the availability of seed capital for its further operation. In today's economic space, an indispensable condition for financial independence is a clear control over cash flows regardless of the speed of their movement. The charter capital is characterized by reduced mobility and rare movements, but on the correctness of its accounting and use depends on the profitability of each company.

Statutory fund

From a legal and economic position, the charter capital provides three important functions:

1. Warranty. The aggregate amount of the charter capital serves as a security for part of the liabilities to creditors.
2. Structural. The amount and amount of participation of each owner (founder) in the statutory fund determines the amount of his income and the degree of his participation in decision-making of managerial nature.
3. Starting. Asset provision at the initial stage of the company formation.

By definition, the charter capital is the amount of assets that the owner (founders) invests in a future company. Depending on the registered legal form, the capabilities of the owners and the scope of the organization's activities, the way to create a warehouse is chosen. As a contribution, the founder can make:

• Monetary (cash, non-cash, foreign exchange) funds.
• Non-current (production, non-productive) assets.
• Intangible assets (estimated value).
• Securities.
• Current assets.

In any variant of creating a posting on the charter capital, the amount of each contribution and the procedure for its use for the needs of the enterprise should be reflected.

Accounting

Account 80 "Authorized capital" is created to reflect all operations of the movement and the formation of funds of the warehouse fund of the enterprise. The account is passive, balance, its equivalent equivalent denotes the actual amount of capital, it is regulated by the legislation of the Russian Federation and the organization's statutory documents. Postings on the authorized capital are formed at its creation and at the moment of its size change in the direction of increase or decrease. Any adjustment to the amount specified in the balance sheet of the enterprise must be agreed with all owners and entered in the constituent documents. The analysis is conducted for each owner separately. As the first posting on the charter capital, the accounting transaction is recorded: Debit 75; Credit 80.

Opportunities for increasing the size

With an increase in the company's stock (statutory) fund, the owners can use various assets. Depending on the funds used, a contribution is made to the authorized capital. Postings are made as follows:

1. Debit 52, 51, 50, 55; Loan 80. Increase of the authorized fund in cash, credited to the settlement, special, currency account of the enterprise.

2. Debit 41, 10, 11; Credit 80. Current assets (materials, goods, raw materials) are contributed by owners to the warehouse fund.

It is also possible to replenish the authorized capital with property, the following are compiled:

1. Debit 01; Loan 80. Fixed assets are contributed to the statutory fund.

2. Debit 04; Credit 80. NMAs are accepted as a contribution to the authorized capital.

Change in the direction of increasing the amount of capital of the enterprise can be made with the consent of all owners at the expense of funds from the profits that are not distributed among the founders, but are sent to the company's authorized (reserve) fund: Дт 84; Кт 80. In the same way, the increase may be from the assets of additional capital or reserve fund, which is reflected by the relevant postings and changes in the constituent (statutory) documents of the enterprise.

Reducing the Fund

To reduce the established size of the share capital is possible only with the participation of all owners. The motivation for this step is the company's financial and economic position. But most often the reduction occurs as a result of voluntary withdrawal from the approved membership of the founders of several or one owner. At the same time, the sum expression of the authorized capital is not always reduced, the share of funds contributed by the former owners can be redeemed by the operating ones. Postings on the charter capital, in case of its reduction, include the following:

• Дт 80; Кт 01, 04. Return of fixed assets, NMA accepted as a contribution to the statutory fund.
• Дт 80; Кт 10, 41, 11. Return of materials, goods to the owner, who left the structure of the founders of the enterprise.

With the contribution of cash or non-cash funds, the refund can be made from the cash register of the enterprise or settlement, foreign currency accounts: Дт 80; Кт 50, 55, 51, 52. To avoid negative consequences of the withdrawal of working assets of the enterprise (negotiable, non-current, material), the owners can agree on the return of the introduced part of the statutory fund in cash (cash, non-cash). To do this, the assets are evaluated, the residual value is calculated.

Reflect changes

With any movement of funds of the authorized capital, documentary confirmation is a prerequisite. It includes the minutes of the meeting of all founders (owners), signed and certified by its participants. On its basis, changes are made to the constituent documents. This procedure takes a long time, requires the adjustment of registration records, so movements on the 80 account "Authorized capital" are rare.