JARD-REF3-L-EQUITY

-ADAMSON UNIVERSITY- Page 1 of 2

ACCOUNTING FOR SHAREHOLDERS EQUITY

It is the residual interest of owners in the assets of anenterprise after deducting all its liabilities.

It is comprised of all fund contributed by shareholders,retained earnings, reserves representing appropriation ofretained earnings, and reserves representing capitalmaintenance adjustments.

Components of Shareholders Equity Contributed (Paid-in) Capital

Represents the amount invested or contributed by owners.This category is composed of share capital and additionalpaid-in capital.

Retained EarningsAlso termed as accumulated profits, represent theaccumulated amount of earnings in the corporation fromthe date of inception less the cumulative amount ofdistributions made to shareholders and other charges toretained earnings.

Other Comprehensive Income Revaluation surplus Unrealized gains/losses on available for sale

securities Foreign currency translation adjustment gains and

losses Other comprehensive income

Contra-shareholders equity accounts Share Capital Subscriptions Receivable Treasury Shares

Legal Capital Par Value Shares

Share Capital + Subscribed Share Capital No-par Value Shares:

Share Capital + Subscribed Share Capital + SharePremium

Authorized Shares, Issued Shares, and Outstanding Shares Authorized Shares

Maximum number of shares the corporation may issue, asstated in the articles of incorporation.

Issued SharesNumber of shares issued to its shareholders.

Outstanding SharesNumber of shares of stock issued and are still in the handsof the shareholders.

Treasury SharesNumber of shares issued to stockholders and reacquiredby the corporation, either by purchase or donation, butare not retired. Treasury shares carry no voting orpreemptive right.

Subscribed SharesShares of stock that will be issued upon completion of theinstallment purchase contract. Subscribed shares shallhave all the right of a shareholder including the right todividends.

Issuance of Share CapitalAccount xxStock Issue Costs* xx

Share Capital xxShare Premium* xx

Issued for cash Issued for consideration other than cash

Non-cash asset Fair value of property; if not,. Fair value of shares issued

Services rendered (Expense) Fair value of services rendered

Settlement of liabilities Amount of liability to be settled

Shares Issued on Subscription Date of Subscription

Cash xxSubscriptions Receivable xx

Subscribed Share Capital xxShare Premium xx

Collection of SubscriptionsCash xx

Subscriptions Receivable xx

In case of delinquencyReceivable fr. Highest Bidder xx

Subscriptions Receivable xx

Receivable fr. Highest Bidder xxCash xxFor payment of expenses in line with bidding.

Full collection of subscriptions and subsequent issuanceCash xx

Subscriptions Receivable xxOr

Receivable fr. Highest Bidder xx

Subscribed Share Capital xxShare Capital xx

Reacquisition of Share Capital Immediate Retirement

Share Capital xxShare Premium xxPaid in Capital - Retirement** xxRetained Earnings** xx

Cash xxPaid in Capital - Retirement* xx

JARD-REF3-L-EQUITY

-ADAMSON UNIVERSITY- Page 2 of 2

Treasury SharesAcquisition of Treasury SharesTreasury Shares xx

Cash xx

Reselling of Treasury SharesCash xxPaid in Capital - Treasury Shares** xxRetained Earnings** xx

Treasury Shares xxPaid in Capital - Treasury Shares* xx

Retirement of Treasury SharesShare Capital xxShare Premium xxPaid in Capital - Treasury Shares** xxRetained Earnings** xx

Treasury Shares xxPaid in Capital - Treasury Shares* xx

Stock Rights, Warrants, and Options Stock Rights

Issued to existing shareholders to permit them tomaintain proportionate interest in the ownership ofthe corporation when new shares are to be issued.

Issuance of stock rights are merely recorded throughmemorandum entries.

Share Warrant Shares with Warrants

Issue price is allocated to both preferenceshares and share warrants based on theirmarket values.

Bonds with Warrants Issue price is allocated first to the market price

of the bonds without warrants attached, anyremainder is allocated to the warrants.

Cash xxDiscount on Bonds Payable* xx

Bonds Payable/Share Capital xxPremium on Bonds Payable* xxShare Warrants Outstanding xx

Share Options Rights granted to employees of an enterprise as part

of a bonus arrangement.

Compensation Expense xxShare Options Outstanding xxAmortization of the value of options.

Cash xxShare Options Outstanding xx

Share Capital xxShare Premium xxExercise of options.

Stock Appreciation Rights This is a cash-settled equity based payment

transaction.

Compensation Expense xxStock Appreciation Rights Payable xxAmortization of SARS Payable

Stock Appreciation Rights Payable xxCash xxExercise of rights.

Share Based Transaction with Cash Alternatives Grantees of this share option are given a choice to

receive additional benefits either in the form of cashor in the form of equity instruments.

On grant date:Fair value of the equity alternativeLess: Fair value of the debt componentEqual: Fair value of the liability component

Compensation Expense xxShare Options Outstanding xxStock Appreciation Rights Payable xx

Cash Settlement is chosen:Stock Appreciation Rights Payable xxShare Options Outstanding xx

Cash xxPaid In Capital xx

Equity Settlement is chosen:Stock Appreciation Rights Payable xxShare Options Outstanding xx

Share Capital xxShare Premium xx